factory. China alone accounted for half the
growth in the world’s oil demand last year,
according to IHS Markit. It buys more than 40%
of the world’s iron ore, coal, nickel, aluminum,
copper and finished steel, UBS says.
Shuttered factories and travel restrictions in
China have contributed to a 20% drop in oil
prices since Jan. 7, when Chinese authorities
identified the new virus. Prices for copper,
soybeans and even lean hogs have all fallen
more than 6% over the same time.
Much of China remains on lockdown. Even
factories that are open must contend with
logistical bottlenecks and labor shortages as
travel restrictions prevent employees from
returning to work after the Lunar New Year.
That’s all worrisome news for multinational
companies that have grown to depend on China
for everything from auto parts to toys.
“This is the worst supply chain problem I’ve
seen in 40 years,’’ said Isaac Larian, CEO and
founder of toymaker MGA Entertainment, which
produces the popular LOL dolls. “There is no
contingency plan.’’
Retailers are increasingly concerned that
shipments will not arrive in time for Easter and
Mother’s Day, which would force them to mark
down the price of merchandise that missed its
sell-by date.
“No one wants women’s bonnets after Easter
Sunday,’’ said consultant Rick Helfenbein, former
president and CEO of the American Apparel &
Footwear Association.
Executives at athletic gear maker Under Armour
warned that the outbreak is delaying shipments
of fabric, packaging and other raw materials