Cum Clave analysis N.08 preview.
Still in crisis, but in sharp decline compared to expectations. Some factories have resumed production. Despite this variable, the situation is still in plaster, but we reiterate that it is less than expected. In some cases, there are shortages of staff with huge areas of China still under lockdown and some local workers are afraid of leaving their homes. Others cannot access the materials needed to make their products and, even if they could, the closure of shops and markets in China means that demand has been weakened.
We reiterate that the scenario represented is lower than expected, a total block was expected, which by the way never happened. The psychosis launched by the international media is still strong.
China is so large that each city can have very different policies linking Chinese steel producers, construction and mining equipment and industrial chemicals with buyers in Africa.
A survey conducted by the American Chamber of Commerce in Shanghai, released this week, found that nearly 80% of respondents in the manufacturing sector were unable to manage their production lines.
An overwhelming 92 percent of the 100 Australian and global businesses surveyed by the Australian Chamber of Commerce in Shanghai last week, meanwhile, said the outbreak would have had a negative impact on their revenues in the first quarter of this year, with over half said it could affect their front-line earnings by more than 20%.
These results suggest that foreign companies may reevaluate their relations with China, which is why it is important to renegotiate prices and transportation.
Short supply chains have fewer raw materials or parts at hand, so if there is any kind of interruption, they will feel the impact first.
Larger companies, such as car or computer manufacturers, are more likely to find the breaking point, that is, to potentially identify the part of no return: bankruptcy.
The fear is that Chinese aluminum foundries will continue to churn out metal even as demand from the country implodes. China is the world’s largest primary aluminum producer, which accounts for 56% of last year’s world production, which could have enormous consequences.
China’s complex production logistics chain is under severe pressure.
Now the semi-finished sector suffers. ShFE’s stocks have increased by 224,508 tons to 409,635 tons since the beginning of January.
We report regional differences in China, we talk about supply.
Imports of bauxite, which is converted to alumina to produce aluminum, reached 101 million tons last year, a record high.
Graphically, the lows are always higher than the previous ones so there are hypothetical next hikes.
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