Following the coronavirus outbreak, with several shipping companies skipping Chinese ports and many Chinese factories shutdown, trade market is passing a period of disruption. According to Bloomberg, physical supply chains are affected due to the above-mentioned situation.
The coronavirus has a negative impact upon exports coming from China to the U.S. and Europe. In fact, handbags, TVs and plastic toys exports have been escalated during February.
With the Chinese market playing a major role in the global shipping, Bloomberg reported that the coronavirus disruptions have left toys makers such as the Hasbro Inc. and fashion companies like Michael Kors, Versace and Jimmy Choo fighting with their supply chains.
Moreover, the toy maker Hasbro reported that the virus disrupts its commercial operations in China, affecting its earnings.
“All the signs are that there has been a major dislocation in global supply chains and commodity trade as well. For some products it’s only going to get worse in February data” said Caroline Bain, chief commodities economist at Capital Economics to Bloomberg.
As 90% of all trade transported through the sea, the National Retail Federation (NFR) and the Hackett Associates rcently issued their “Global Port Tracker” report, informing that imports at U.S. retail container ports are expected to experience a drop during February.
According to Alan Murphy, chief executive officer of container shipping analysis company Sea Intelligence, around 600.000 20-foot boxes have quit their usual operations, an increase from the last week’s amount.
In light of the situation, one the largest shipping companies. AP Moller-Maersk A/S has already 27 blank sailing since 31st of January.
Apart from the retailers, coronavirus may drop the Chinese liquefied petroleum gas demand by 3% in the following period, causing cut in the LPG shipments and affecting the freight rates.
At the same time, China’s crude oil, iron ore and coal imports are at levels well below the preceding months for February and also from the same month last year.
According to the news agency Xinhua, shipbuilding industry will experience some delivery delays, even from the most vital shipbuilders since some of the largest private shipyards in China still remain closed.
