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Post-holiday resumption of metal processors delayed due to coronavirus outbreak

iconJan 29, 2020 22:50
Source:SMM
Most smelters continue to produce during the holidays

SHANGHAI, Jan 29 (SMM) - Downstream producers of the nonferrous metal industry in China have announced to postpone their resumption after the Chinese New Year as the government extended the seven-day CNY holiday due to the novel coronavirus outbreak. Most smelters, however, continue to produce during the holiday, and logistics and warehousing enterprises keep most of their businesses running normally, a SMM survey showed.

The novel coronavirus was first identified in central Chinese city Wuhan, Hubei province as Wuhan health authorities confirmed 27 cases of pneumonia caused by the novel coronavirus in a statement on December 31, 2019.

Additional cases have been identified in a growing number of other locations as China enters its busiest travel season of the year. According to China’s National Health Commission, the number of cases in mainland China rose to 6,014 as of 15:00 CST January 29, with 132 deaths and 109 cured. The majority of the reported cases are in Hubei and nearby areas.

Chinese government has already extended the CNY holiday to February 2 nationally, and to February 9 for Jiangsu, Zhejiang, Guangdong, Shanghai, Tianjin and some other major production-oriented provinces/cities, in order to avoid a further escalation in the disease outbreak. The holiday extension does not apply to companies related to public utilities (water supply, gas supply, power supply, communication), epidemic prevention and control (production and sales of medical equipment, medicines, protective products), and other enterprises concerning national welfare and the people’s livelihood.

As of January 29, nine provinces/cities have issued notices that required post-holiday resumption of local companies should be no earlier than 24:00 CST February 9. Stock and futures exchanges and financial institutions said they will resume on February 3.

Here is the resumption schedule of upstream and downstream producers in the metal industry as SMM surveyed.

Smelters (copper, aluminium, lead, zinc, nickel and nickel pig iron)

Smelters operated as previously planned during the CNY holidays. “At present, we are asked to return to work on February 3, and we have not received the notice of delaying the resumption to February 9,” a source at a smelter told SMM. Even if the holidays are extended, production at the smelter is unlikely to suspend, he added. As for secondary lead smelters, those who planned to resume production at the end of January or the beginning of February, have decided to sit idle until at least the second week of February; those who planned to resume production after February 8 would go ahead with their plan.

Downstream processors

In regions where the local governments have announced that companies should not resume operations earlier than midnight on February 9, processors will delay their production recovery date to various extents. The holiday extension is likely to have limited impact on downstream processors in Guangdong, as most processors there originally planned to resume production after February 8. In Tianjin, a large-scale galvanising plant will delay its resumption date from the original February 3 to February 11. Zinc die-casters, copper processors and aluminium extruders in Jiangsu, Zhejiang and other regions will extend their suspension as required—resuming operations no earlier than February 9.

As for lead-acid battery producers, those in Jiangsu, Zhejiang and other regions will extend their holidays to the second week of February, a week later than their original plan. Most distributors and retailers are unlikely to reopen until at least February 9. Some distributors told SMM that their return will depend on the developments on the coronavirus outbreak.

Transport

While logistics information companies of the metals upstream and downstream industry have received showed that rail transport operated as normal, shipping metals by trains is set to feel impact from the spreading coronavirus as supplies for epidemic control and prevention as well as basic livelihood are set to be prioritised. As for road transport, transport capacity is set to reduce, even as it is not sure yet whether trucking companies will extend their holidays to February 9.

Storage & warehousing

In Shanghai, most major warehousing firms will resume operations on February 3, while some will reopen on February 10 but have somebody in the office.

Customs

Chinese customs will recover operations on February 3.

Traders

Major traders in Shanghai have yet to decide whether to extend the holidays. Some traders will resume on February 3 as originally planned, even as trading activities are set to take a hit.

Others

Small battery scrap dealers typically return to the market after the middle of the first lunar month, but their resumption is likely to be postponed this year, said battery scrap recyclers.

Coronavirus

For queries, please contact Michael Jiang at michaeljiang@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

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