Chinese mineral producers trying to return to work amid the
coronavirus disruptions are being hampered by the continuing
shortage of land freight options and restrictions on border
Almost all land transport movements in China ground to a halt
in the weeks following the first outbreak of novel
coronavirus. A shortage of lorry drivers and rail freight
cars made the transport of cargo within the country and to
and from ports almost impossible.
What developed over the few days up to Friday February 14 was
a logistics scenario that remained patchy in many areas,
while a few provinces were slowly returning to a degree of
Coast versus 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, although some were still closed.
Similarly, in Shandong province, a hub for graphite
production, operations in the city of Qingdao 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 away.
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 said that
authorities 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 would
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
Provincial borders shut
Another critical point is that transport between
provinces is very limited because 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
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 it."
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 and shipments
Operations in many parts of China remain closed at
the time of writing. 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
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 ends.
Considering that most land logistics are 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 of
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."