Almost all land transport movements in China ground to a
halt in the weeks following the first outbreak of novel
A shortage of lorry drivers and rail freight cars made the
transport of cargo within the country and to and from ports
What has developed over the past few days up to Friday
February 14 is a logistics scenario that remains patchy in many
areas, while a few provinces are slowly returning to a degree
of normal operations.
Coast vs inland
The first distinction to make is that there seems to be a
remarkable difference in the ability of factories, and to some
degree of the transport sector, to operate between coastal
areas and China’s interior.
Some provinces on the coast, such as Liaoning in the north,
have gradually restarted material movements, with local
companies allowed to resume operations. Most magnesia producers
in Liaoning reported to Fastmarkets that they have resumed all or part of their
production this week, although some were still closed.
Similarly, in Shandong province, a hub for graphite
production, operations in the city of Qingdao have gradually
restarted after a couple of weeks of closure.
The proximity of Shandong’s graphite producers
to local ports seems to be a main indicator of their ability to
resume operations before others that are based further
Critically different is the situation in the
country’s interior. Many of China’s
inland provinces, including Shanxi, Henan, Hubei, Sichuan,
Inner Mongolia and Ganzhou, continue to see significant
disruptions to land transport.
At least two sources speaking to Fastmarkets this week said
that authorities have imposed an extended period of closures on
lorry companies and couriers operating in the provinces of
Shanxi and Henan (potentially in nearby areas as well) that
will last until the second week of March.
What this means is that very little cargo can be moved on
roads in these areas for almost another month.
"The price of transport today, even by train, is up to 1,560
yuan [$223] per tonne to Tianjin," one seller said. "But road
transport is impossible because no trucks are available and
[anyway] they do not have permission to drive to Tianjin. Maybe
next week it will change; we just don’t know."
Provincial borders shut
Another critical point is that transport between provinces
is very limited at present. Authorities want to be sure that
they can track the origins of vehicles and contain the
movements of people and goods. Consequently, provincial border
checks have become much stricter.
"Logistics is very patchy all across China," one local
producer of bauxite and alumina said. "Crossing provincial
borders is downright impossible now. So, if you are anywhere
inland, you can’t move material to the ports on
"We don’t expect to be able to ship anything
out of our plant until the first or second week of March -
there are no couriers available," a second producer, with
operations in Shanxi, added. "What this means is that no ships
are going to be loaded until March 18 at the earliest."
Rail connections were reported to be working although only
on limited routes. The availability of rail cars was also few
and far between.
"Moving material by train is possible, although limited,"
the producer said. He added that the lack of lorries to move
material to and from rail terminals compounds the problem.
"Even if I could get a rail car, I cannot find a truck to take
the cargo to the train terminal," he said. "So there you have
The first producer offered another example: "Yesterday, a
truck wanted to come [to the plant] but could not. It had to
get permission to come in, from the police, and this took more
than 10 hours – just for one truck."
Late operations, late shipments
Operations in many parts of China remain closed. The
movement of people continues to be restrained, so workers who
left industrial cities to visit their relatives for the Chinese
new year celebrations are still, in many cases, unable to
return to their places of work.
As previously reported, those workers who have made it back
are not immediately being allowed to return to work. They must
spend as long as two weeks with their temperature being checked
on a daily basis - to monitor for fever symptoms - before being
allowed to resume work. This means that a lack of staff adds to
companies’ inability to run.
With logistics operations down, feedstock cannot be
delivered to factories, nor finished products sent out for
delivery to customers, blocking the supply chain at both
Considering that most land logistics is expected to remain
under constraint until March, local sources have estimated that
delays in sending shipments to destination markets may extend
for more than two months, in some cases.
"If you reach port in the second half of March, add more
than 40 days for the vessel to reach a European port, one week
on either end for loading/unloading and clearing, and a few
more days to deliver to your customer’s plant,"
one distributor said. "In short, nothing is going to arrive
from China into Europe before May – probably the end
One refractories producer in Southern Europe said that he
has been given even later estimated times of arrival from his
suppliers. "Most of the inquiries I have put out," he said,
"now estimate arrival in June or July."