Coronavirus disruptions in China – breakdown by province

By Davide Ghilotti
Published: Friday, 21 February 2020

Logistics disruptions across China have paralysed many of the country’s supply chains since the outbreak of a novel coronavirus infection forced authorities to clamp down on movements of material and people within the country.

What has become increasingly evident is that different areas have seen their abilities to operate and to move cargoes affected to varying degrees, and that some mining, metal and mineral sectors have been affected more seriously than others, depending on their exact location within China.

Fastmarkets has collated here a list of the key provinces and areas of the country where main production operations are located, and the latest updates on logistics and operations status in each area, in the week ended Friday February 21.

Coronavirus map  

Heilongjiang: graphite production was still shut down for the winter months. The seasonal halt could last until the end of March. The northern province of Heilongjiang was among those least affected by disruptions. At the same time, transport was restricted due to the border with Russia being blocked as well as a shortage of drivers available for cross-provincial orders.

Liaoning: magnesia production gradually restarted last week, although a lack of workers at factories caused slower order deliveries (there remained a shortage of staff because people who travelled outside the province for the new year holiday have yet to return). Logistics within Liaoning province ran smoothly, but trans-provincial transportation was at a drip-feed rate. Proximity to local ports without crossing provincial borders was a key factor in the restarting of operations.

Tianjin: port was open but running at low capacity, because cargo was unable to reach harbour terminals. The city border at Hebei was reported to be allowing cargo through to the port albeit intermittently, and only with prior special consent. Reports of delays were raised for material located in the area.

Shandong: graphite production in Qingdao was gradually restarting. Proximity to local ports without crossing provincial borders was a key factor in the restarting of operations here as well.

Shanxi: most bauxite operations, both mining and calcination, were still closed. Land logistics movements were down for the most part, on a shortage of trucks and drivers. Border closures to the south and east were making shipment of material to ports very difficult. Local land couriers were banned from operating until the second week of March, according to Fastmarkets’ sources. The delivery of semi-coke, a raw material for ferro-silicon production, was slightly improved although movements of cargoes in and out of the province were still limited.

Henan: fused alumina production in most cities in the province remained closed until further notice. As for neighboring Shanxi, land logistics were down and there was a shortage of trucks and drivers. Local land couriers were banned from operating until the second week of March, according to Fastmarkets’ sources. Yuguang Gold & Lead suspended operations at one 100,000 tonne per year zinc production line of a 300,000 tpy smelting complex.

Shaanxi: Hanzhong Smelter, which has three production lines with capacity for 360,000 tpy, has cut at least one-third of its zinc output. Shaanxi borders Hubei province, and Hanzhong is offloading sulfuric acid for less than the cost of production due to exceptionally low demand.

Sichuan: the province is China’s top producer of ilmenite, vanadium and titanium dioxide. Road freight was badly affected, with major disruption on the overland routes to ports in Shanghai, Guangzhou and Shenzen. Lithium producers in Sichuan, one of the production hubs for lithium compounds in China, gradually began to restart from February 10. Logistics began to recover over the past week, but there were delays because there were fewer freight cars and qualified healthy drivers available. Local chrome-based chemicals producers have gradually restarted too, although the availability of chemical-grade chromite raw material on site was deemed sufficient to cover requirements for the time being.

Hubei: this province was the epicenter of the coronavirus outbreak, and is also a major ilmenite producer. The province has been extremely badly affected by the quarantine measures, with businesses still in lockdown. A number of chrome-based chemicals producers are also based in the area: some of these have been able to resume partial operations, although logistics constraints were set to delay delivery of outbound cargo to ports.

Daye Nonferrous, one of China’s largest copper smelters, remains in production, albeit at reduced rates. Hubei is also the location of a large part of China’s fertilizer and chemical industry, which consume sulphuric acid, a byproduct of the smelting process; smelters may have to cut production if left without an outlet for acid sales.

Guizhou: producers of brown fused alumina were restarting production gradually after the new year break. The province saw fewer restrictions on local operations, but the lack of inbound transport was causing shortages of feedstock, as well as making it impossible for local companies to truck material out to ports. The long distance to main ports meant that fulfilling orders may be more costly and incur delays.

Inner Mongolia: high-carbon ferro-chrome production was still being affected by the transportation problems between ports and Inner Mongolia, which has resulted in insufficient feedstock reserves. Smelters were expecting smoother logistics in the coming weeks with newly released government policies to ease road transport restrictions. This area is also one of the hubs of light rare earth production. The border between Mongolia and China will be closed until the end of next month, affecting fluorspar supply into China.

Jiangxi: tungsten concentrate and APT plants in the region were able to resume operations once permission was granted by the local government. But production rates remained low, and were expected to return to normal only in late March. Logistics costs continued to rise despite the easing of transportation constraints. Ganzhou city is the local hub of heavy rare earth production.

Hunan: the resumption of antimony production was further postponed by lockdowns in Lengshuijiang, the major hub. The date for a restart of operations remained unclear; it was not easy to deliver raw material ore into the area.

Yunnan: major germanium suppliers were gradually resuming production but still faced challenges from the lack of sufficient workers and raw materials to maintain normal operating rates, and the continuing road-transport constraints.

Xinjiang: the silicon production rate in the region was about 30-50% due to the limited supply of raw materials. Truck transportation remained disrupted, and the rail transportation service was tight.

Ningxia: production of manganese flake in the region remained normal because enough raw materials were stored before the Chinese new year holiday. Cargo was able to reach ports by rail.

Shanghai: stocks of base metals, predominantly copper, have built up in the port of Shanghai, with no trucks available to take them to the city’s bonded zone.

Zhejiang/Guangdong: cobalt refineries in Zhejiang have restarted operations, with cross-provincial cargo deliveries resuming under eased transportation restrictions, and cobalt raw materials deliveries from the port of Ningbo were also getting smoother. The local authority in the city of Hangzhou will allow workers to return to their offices next week. Hangzhou is where many fluorochemical producers are based. Zhejiang and Guangdong are also home to the world’s largest concentration of copper-consuming fabricators and scrap processers, many of which remained idle or were just returning to work at the time of publication.

But copper smelter Guangxi Nanguo has declared force majeure on shipments of copper concentrates, citing logistics difficulties.

William Clarke, Carrie Shi, Sybil Pan, Amy Lv, Susan Zhou, Ruby Liu, Siyi Liu, Archie Hunter, Julian Luk and Michael Greenfield contributed to this article.

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