The spread of the new crown pneumonia epidemic has a global impact. Although the World Health Organization (WHO) does not recommend travel or trade restrictions on countries currently suffering from the new crown pneumonia epidemic, countries still generally use enhanced port control as a means to curb the virus's cross-border spread. International shipping is being restricted by regulatory measures. This has partially disrupted the normal trade flow of global petrochemical raw materials and products. Due to the uncertain future trend of the new crown pneumonia epidemic, the interference of international chemical logistics and the decline in market demand are adding to the pessimism of the chemical market sentiment.
Multinationals strengthen port control
On March 4, the WHO released a new version of international travel advice for new coronary pneumonia. WHO noted that the agency does not recommend travel or trade restrictions on countries currently suffering from the new crown pneumonia epidemic. Because a large number of infected people are in the incubation period or are asymptomatic, prevention and control measures similar to temperature screening are not effective means of epidemic prevention. Prohibition of entry to affected areas or refusal of entry of persons from affected areas usually cannot effectively prevent case import, but it may cause Significant economic and social impacts, which may disrupt required assistance and technical support, may disrupt business, and may have negative social and economic impacts on affected countries.
But in fact, as the new crown pneumonia epidemic continues to spread across the globe, countries have continued to strengthen border control and control while strengthening their own disease prevention and control measures, and have continued to expand with the development of the epidemic. According to data released by the National Migration Administration, in order to prevent and control the new crown pneumonia epidemic, as of 24:00 on March 2, a total of 139 countries (regions) around the world have adopted different degrees of control measures due to the new crown pneumonia epidemic. Although the control of most countries does not involve the flow of market products, and most of them will not completely prohibit the entry of people, because the epidemic control requires many additional procedures to be added to the original trade process, which will inevitably affect the efficiency of market circulation.
Chemical trade has been affected
As the WHO is concerned, port control has indeed had a negative impact on international trade. In terms of chemical products, as the key driving market for the outbreak of the new crown pneumonia epidemic and global petrochemical demand, the control of Chinese immigration personnel by a number of countries and China's own series of policies have had a huge impact on the global trade flow of chemical raw materials and products. Under the influence of New Crown Pneumonia, in February, the trade efficiency around the Chinese market slowed down, and the market flow also changed.
In terms of trade efficiency, Senthuran Raviraj, a chemical shipping analyst at Maritime Strategies International (MSI), a British shipping consultancy, said: "Affected by the new crown pneumonia epidemic, many routes in East Asia have been rerouted, or no longer pass through China, or cancelled directly. Ships need to wait for quarantine permits before leaving the port, and their navigational efficiency is limited. In addition, due to the rapid spread of the epidemic in Asia, similar inspections of ships have also appeared in various ports in Asia, which will cause further delays in trade in all shipping sectors. "
A US shipbroker said that ships berthing and not berthing at Chinese ports must conduct self-inspection. Most port authorities require measuring the temperature of each crew member and preventing the crew from going ashore. It is not difficult to understand why the crew avoided entering China, because according to the multi-national control measures during February, if the crew enters China, they may be refused entry by other countries.
In addition, due to the slowdown of demand in China and the recent commissioning of some large refineries, China's import demand has fallen in the short term. As bulk shipping relies on China's strong demand for imports, the temporary slump in China's industrial production will exacerbate seasonal declines. Taking polyethylene (PE) as an example, despite the surge in demand for PE in medical applications, senior analyst at AXIS Asia Petrochemical Analysis Co., Ltd. said that due to the epidemic, China ’s polyethylene (PE) demand may be reduced by about 1.5 million tons. The premise is that China can control the epidemic in the second half of March, and the resumption rate of downstream industries reaches 70% to 80%. The impact of demand will also lead to a decrease in transportation volume, and similar situations will certainly affect chemical traders.
Uncertain future situation
Entering March, the spread of the new crown pneumonia epidemic has accelerated worldwide, and the uncertainty it brings has also brought new challenges to global chemical traders.
The future trend of the new crown pneumonia epidemic is uncertain, and it will not be clear how much impact it will have on a specific country. The effects of epidemic prevention and medical measures in various countries are now difficult to predict. Due to the high degree of uncertainty, opinions on the impact of the new crown pneumonia epidemic in the international market are divided. Different predictions are based on different regions and products, and conclusions vary. At this stage, the lasting effects on the international market have not been fully understood, because the risk of the spread of the crisis still exists and may continue to weigh on demand in the long run.
From what is currently known, the epidemic has affected the chemical trade in Asia, which is currently the hardest hit area. With the increasing number of new cases in countries other than China, global trade may slow further. For example, with the surge in confirmed cases in South Korea, ships entering and leaving Northeast Asia will experience further disruption. A trader in the East African market said that the local market has suffered ship delays because some shipping companies have cancelled shipments across the Asian route. An American shipbroker said: "The new crown pneumonia epidemic will definitely affect shipping, and some cargoes and routes have been cancelled." In the next few weeks or even days, if the epidemic situation further intensifies, similar phenomena may intensify.
