Chinese traders, trading in copper, ask their suppliers in different countries - from Chile to Nigeria to cancel or postpone delivery of the metal on the backdrop of a sharp fall in demand in terms of the spread of coronavirus.
Many Chinese buyers of copper cancelling or asking for a postponement of the delivery of the metal from abroad, citing force majeure, from the end of January, writes the Financial Times.
the Demand for copper is considered a barometer of the health of the world economy, and its fall indicates serious implications of the spread of coronavirus to Chinese economic growth.
the Attempts of Chinese authorities to contain the spread of coronavirus from restrictions in road traffic before extending the period of celebrating the New year according to the Lunar calendar had a negative impact on industrial activity that is likely to lead to a significant weakening of growth in the Chinese economy.
"the Coronavirus has had a huge impact on the demand for copper, because the companies that are engaged in production of metal ceased to buy raw materials," said one of the managers trading company Guangzhou Zhongshan Trade on condition of anonymity.
Guangzhou Zhongshan this week asked for suppliers from Chile and Somalia to delay the delivery of about 500 tons of copper with a total value of 25 million yuan (about 3,57 million dollars), at least for a week. The company also cancelled a preliminary contract with the Somali provider and ceased to issue new orders.
"the Epidemic is a problem not only of China, is a global problem," says the Manager.
According to him, business activity in the port of Guangzhou, where the commodity trade declined sharply in recent times. Traders working in Guangzhou, told the FT that soon a dozen more Chinese traders may declare force majeure to cancel the contracts on imports of copper.
Guangzhou is about 1 thousand kilometers from Wuhan, the center of an epidemic of pneumonia caused by a novel coronavirus which has already killed more than 600 people.
Chinese buyers of liquefied natural gas (LNG) are also considering to use the clause on force majeure to cancel contracts, the newspaper said.
