WASHINGTON—Rubber product and chemical producers in China are facing the same sweeping impacts as other industries in the continuing threat of the coronavirus.
Petrochemical demand alone could fall by between 2.4 million and 4 million metric tons because of the virus, according to Bill Hyde, senior director-olefins and elastomers at Houston-based analytics firm IHS Markit.
The Chinese automotive market also is facing a sharp fall, with obvious impacts for manufacturers of tires, hoses, belts and other rubber auto parts, Hyde said.
As of Feb. 19, total deaths from the coronavirus stood at 2,004, with more than 74,000 reported cases in China alone. The World Health Organization has reported more than 800 additional cases in 25 countries.
There have been quarantines and travel bans worldwide to try to prevent the spread of the virus. Shipments of goods also have been affected. The Wall Street Journal reported Feb. 18 that more than 50 sailings of container ships from China have been canceled since the epidemic began.
To date, travel bans have had the most severe effect on the natural rubber trade, according to an industry source.
"My colleagues usually travel on a regular basis, but now they're not traveling at all," the source said. "The biggest effect was the cancellation of the annual rubber dinner in Singapore. It's a huge event that draws traders from the U.S., Europe and across Southeast Asia. But it's not taking place this year."
The overall Chinese economy will be significantly impact by the virus, according to Hyde.
"Our best estimate right now is that Chinese GDP growth will be reduced by around 0.4 percent this year to about 5.4 percent," he said. "A more aggressive scenario could result in GDP growth below 5 percent in 2020."