Half of manufacturers already cancelled Photokina?!

It is enough to check airlines cancellations end dates, they are all in the end of March already.

...and https://jameslyonsweiler.com/2020/01/30/on-the-origins-of-the-2019-ncov-virus-wuhan-china/

On Saturday, Huanggang, a city of 6 million people near Wuhan, has banned residents from leaving their homes in an effort to stop the coronavirus. The ban states that 1 person per family can leave every other day to buy basic needs.

Chinese manufacturing issues will become apparent starting mid February.

President Donald Trump on Thursday sought to assure Americans about the spread of a new coronavirus, saying it would have “a very good ending for us … that I can assure you,” hours after the World Health Organization declared the outbreak a global emergency.

https://www.politico.com/news/2020/01/30/trump-close-cooperation-china-coronavirus-109701?fbclid=IwAR2u2pCs-IqaIxChQUzyaskA26Whp6t6zfKdYXiececPj1BqrRvdYW6hV_E

China's coronavirus could bring jobs, manufacturing back to the US, Trump Commerce Secretary Wilbur Ross says

https://www.msn.com/en-us/money/markets/chinas-coronavirus-could-bring-jobs-manufacturing-back-to-the-us-trump-commerce-secretary-wilbur-ross-says/ar-BBZu6xa?fbclid=IwAR3QYyGTJL3qI88CCE036adhsVoGCxW5F5ka6ueY5QLDx4RU7VYOgqIII7c

The electronics industry is poised for a cascading disruption that could change industry growth forecasts for the year. Bill McLean, president of semiconductor research firm IC Insights, said the virus has exacerbated the economic unease that has stalled semiconductor capital investment.

“Brexit, trade issues and now the coronavirus are causing global uncertainty,” he said at a Boston-based forum. “Uncertainty causes [businesses and consumers] to freeze.” Worldwide, semiconductor capital spending is forecast to decrease by roughly 6 percent this year, from $103.5 billion in 2019 to roughly $97.6 billion.

Zhang Ming, an economist at government-backed think-tank the Chinese Academy of Social Sciences, warned that the virus could push China’s economic growth below 5 per cent a year in the first quarter, reported the Financial Times. Economic consensus currently puts China’s GDP growth at 5.7 percent. That average has steadily declined since 2018, according to McLean. — EE Times

More than 300 of the Global Top 500 companies have a presence in Wuhan, including Microsoft and Siemens. Wuhan is located in the Hubei Province.

Wuhan has 10 car factories, including those Honda, Renault, PSA and General Motors. The car industry represents around 20 percent of the city’s economy and employs 200,000 people directly and more than a million indirectly.

Most factories lose about two weeks of production in total during the Lunar Holiday but more production will be lost as the holiday has been extended.

https://global-macro-monitor.com/2020/01/31/the-global-supply-demand-shock-of-the-coronavirus/

Notice about stock market in #China. No one is allowed to sell when the market resume on Feb. 3. Biding price to be controlled before opening, no net sell before Feb. 7. Needs special permission for sales over 10M yuan.

Smartphone shipments in China are likely to fall off a cliff in the first quarter of 2020 due to the coronavirus outbreak, according to industry sources.

Cameras sales will drop around 4-5 times in China in virus affected part of Q1.

There is a great disturbance in the Force

Already, FedEx announced “adjusted” service in “many provinces in China,” and said Friday that customers “might experience delay.” While UPS is airlifting more than 2 million masks and protective gear to China, the logistics firm has cancelled 22 flights to the country. American Airlines cancelled all flights to China through March 27, and Delta did the same through April 30. British Airways, Lufthansa, United Airlines and Virgin Atlantic, among others, have all made similar moves, and Cathay Pacific, which has its main hub at Hong Kong International Airport, said it will more than halve its flight capacity to mainland China through the end of March.

“This is going to be a significant disturbance in the supply chain,” Sean Maharaj, managing director of global management consultancy AArete, said. “We compare this to the impact of SARS (severe acute respiratory syndrome), but the export capability and global merchandise manufacturing was significantly different in terms of not only the volume coming out of China, but the complexity of the supply chains.”

The supply chains of 2003 China when the SARS outbreak started, and plagued as many as two dozen countries before it could be contained, are a “quantum leap” from today’s, Maharaj said. “The Guangdong province alone exported more in 2018 than China did as a whole 17 years ago, so it’s pretty significant,” he said. “This is going to have repercussions, in my opinion, for years.”

Taking transportation alone, any goods coming out of China will face export challenges. “This is going to be a major issue in terms of shipments. Longshoremen, cargo ships are going to be short of volume, there’s going to be way too much capacity…and excess capacity is pushing down already fragile rates,” Maharaj said, adding that this comes on top of tariffs that have already weighed on costs. Air freight quotes have already gone up. “This will go all the way through to warehousing and everything we do to get production on shelves,” he said.

With companies like FedEx and UPS already making moves to halt service, delays may be the least of the supply chain’s concerns. “Once providers like that go into crisis mode, we’re looking at more than delays,” Maharaj said. “We’re talking about cancellations and non-shipments.” Even companies considering temporary inventory holds may be met with new challenges in trying to transfer goods out of China to get them to where they’re going on time. “That’s going to be a major constraint,” Maharaj said.

Mainland China and Hong Kong-based buying offices have asked staff to work from home until further notice, and with many brands and retailers in the midst of Fall/Winter buying, travel restrictions could hinder those orders. Some Western retailers have even cancelled planned visits from Chinese mills.

Multiple firms got requests to not go to work till February 17th.

It is expected that government will prefer to extend measures by one week instead of openly tell about April.

@jleo

Just watch out as all the "pleasant" sides of capitalism start to show themselves in China soon, as reserves will be going out for both small and medium firms. Individuals will be also abandoned with hundreds of millions suddenly not having money and trying to return home again.

Airpods shortage soon?

The US tech giant had ordered its suppliers to produce up to 45 million units in the first half of the year to keep up with surging demand for the wireless earphones.

Now, however, the current stock of AirPods is running low, with most of the finished products reserved for Apple's own online and offline stores, the sources said. Currently, the standard AirPods are still in stock, according to Apple's official online store, while there is a one-month waiting period for the premium AirPods Pro launched last September.

Luxshare Precision Industry, also known as Luxshare-ICT, Goertek and Inventec, the three key manufacturers of the AirPods, have halted the majority of production since the Lunar New Year break began, two people familiar with the matter told Nikkei. The three companies now have at most two weeks' worth of materials and components needed for AirPods assembly, and must wait for component makers across China to restart operations in order to receive fresh supplies, the people said.

"Because of the virus outbreak, it has already been about two weeks since the assemblers have shipped any new AirPods series," said a person familiar with the situation. "All of the stores and carriers selling Apple products are really counting on suppliers to resume work next week..

The three major AirPods assemblers, like other Apple suppliers, are scheduled to resume work on Monday, but their production utilization rates may reach just 50% at best in the first week given the current conditions, a source familiar with the matter said.

"One of the big concerns is whether other parts suppliers in China can smoothly resume work to produce enough parts for final assembly," the person said. "We really have to wait and see how things play out next week. If the assemblers could not get enough supply of parts in two weeks, it will be a big problem."