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.
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
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
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
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
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
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
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
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.