Economic Impact on S'pore? - Wuhan Virus vs SARS Outbreak.

[inlinesix]

https://paultan.org/2020/02/04/hyundai-suspends-south-korea-production-due-to-china-parts-shortage-disruption-from-coronavirus/
 

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Hyundai suspends South Korea production due to China parts shortage – disruption from coronavirus

 

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With the novel coronavirus outbreak showing no signs of slowing down, many carmakers have suspended production in China in line with government guidelines. These include Tesla, Ford, PSA, Nissan and Honda, among others. However, now comes the report of Hyundai suspending production not in China, but in its home base of South Korea, due to parts supply disruption resulting from the coronavirus outbreak.

Most of Hyundai’s Korean factories will be fully idled from February 7, while some production lines are expected to restart on February 11 or 12, a union official said. Schedules for suspension will vary by production line, a Hyundai spokeswoman said, reported by Reuters.

Prior to this, Hyundai had already stopped production of the flagship Palisade SUV over the weekend due to a shortage of components from China. Wiring harnesses is the part in shortage, auto industry officials said. Hyundai Kia, the world’s No.5 automaker, does not keep large stocks of the part, which is mostly made in China, said Lee Hang-koo, senior researcher at Korea Institute for Industrial Economics & Trade.

“Hyundai and Kia may be more affected as they tend to import more parts from China than other global automakers,” Lee said, explaining that Hyundai’s reliance on China has grown sharply as it built a huge production capacity in the country several years ago when its business was booming there. “South Korean parts makers followed and built their own facilities along with Hyundai,” he added.

According to trade data, South Korea imported US$1.56 billion (RM6.41 billion) worth of auto parts from China in 2019, versus US$1.47 billion (RM6.04 billion) in 2018. Hyundai has seven factories in its homeland, which together account for about 40% of the company’s global output.

This disruption to supply and production comes at a bad time for Hyundai, as it breaks momentum for the Korean carmaker, which recently turned in its best quarterly profit in over two years. Hyundai said it was on track for higher profit margins, boosted by more sales of SUVs such as the Palisade and Kona.

 

[Bacteria83]

Trump cant stop the bull. This highly contagious virus may be that black swan that bring back Mr Bear. 

[Wt_know]

4 hours ago, Showster said:

What they did is correct, but the timing was wrong. They should have done so earlier and/or scrutinised all novel viruses carefully, stamping their spread right from the start. 

Nature always finds a way (Jurassic Park). 

talk is easy

a city with 11 millions population if 10 or 100 people sick after going to a market  ... immediately declare pandemic and lockdown the city?

i do not condone cover up (likely for wuhan virus) but declare pandemic and lockdown is definitely not an easy decision from the beginning (first moment)

in all catastrophe incident ... it’s always ... always ... even like fukushima incident ... always slow response and indecisive that cause problem become out of control

Edited February 4, 2020 by Wt_know

[Jamesc]

Why cancel NATAS? I wanted to book cruise for my MIL.

Diamond Princess.

[Jamesc]

So COE go down or not?

[Showster]

2 hours ago, Wt_know said:

talk is easy

a city with 11 millions population if 10 or 100 people sick after going to a market  ... immediately declare pandemic and lockdown the city?

i do not condone cover up (likely for wuhan virus) but declare pandemic and lockdown is definitely not an easy decision from the beginning (first moment)

in all catastrophe incident ... it’s always ... always ... even like fukushima incident ... always slow response and indecisive that cause problem become out of control

I feel that China still has not got the cards right to deal with novel viruses in a systematic way.

The numbers were probably over suppressed from the beginning.

SARS was a lesson that was not properly learnt. The most invisible has the greatest chance to spring the greatest surprise.

The problem is that in a decade’s time, they will also forget the lesson they learnt in 2020.

Edited February 4, 2020 by Showster

[Atonchia]

If got 3.4m Chinese tourists visit SG each year, that meant close to 300k per mth.

If Each one spend $1k, 

So each month loss is close to $30million. 

One year loss is $3.4b

 

[Kb27]

It would impact the oil companies. Crude oil will fall, less travel, flights cancelled.

No one's moving around much.

[noobcarbuyer]

https://www.todayonline.com/singapore/16-exhibitors-pull-out-singapore-airshow-aviation-leadership-summit-cancelled-amid-novel

16 exhibitors pull out of S'pore Airshow, summit cancelled to ‘allow aviation leaders to deal with coronavirus situation’

SINGAPORE — Sixteen exhibitors have pulled out of the Singapore Airshow 2020, and an associated leadership summit for aviation leaders has been cancelled, the airshow organisers said on Tuesday (Feb 4).

But Singapore Airshow 2020, due to be held from Feb 11 to 16, is going ahead, with additional precautions to safeguard those attending, given the novel coronavirus outbreak, organisers Experia Events said in a media release on Tuesday.

Citing factors such as Singapore’s recent travel restrictions, the firm said that 10 exhibitors from China and six from four other countries — Canada, Germany, Britain and the United States — have pulled out of the event.

South Korea's air force has also pulled its Black Eagles aerobatic team from participating in the Airshow this year.

In addition, the Singapore Airshow Aviation Leadership Summit — originally slated for Feb 10 — has been cancelled. The summit was originally planned to involve 300 aviation leaders, including government officials, civil aviation authorities, airport operators and airline executives.

“This will allow many of the aviation leaders who are deeply involved in working out the responses to the novel coronavirus outbreak to focus on exigencies related to the ongoing situation,” Experia Events said.

The improved precautions for the airshow include enhanced cleaning and refuse management, temperature screenings, providing hand sanitisers to attendees, and having a team of doctors on medics to attend to visitors who are feeling unwell.

“In the coming week, we are focused on delivering the show while ensuring the overall safety of our attendees,” said Experia Events managing director Leck Chet Lam.

“During this period, we will continue to work with the relevant authorities and do our utmost to offer support to our exhibitors, partners and visitors who require assistance,” Mr Leck added.

The event is held at the Changi Exhibition Centre every two years. About 80,000 people attended the 2018 airshow, which has been described as the biggest aviation exhibition in Asia.
 

[noobcarbuyer]

https://www.reuters.com/article/us-china-health-economy-goldman-sachs/goldman-sachs-estimates-modest-hit-to-2020-global-growth-from-coronavirus-idUSKBN1ZY178

Goldman Sachs estimates modest hit to 2020 global growth from coronavirus

LONDON (Reuters) - Goldman Sachs says 2020 global growth will take a modest hit from the outbreak of coronavirus, assuming an aggressive response from authorities in China and elsewhere to bring the rate of new infections down sharply by the end of the first quarter.

Annual-average global GDP growth in 2020 will be downgraded by 0.1 to 0.2 percentage points, the bank estimated.

[noobcarbuyer]

11 minutes ago, Kb27 said:

It would impact the oil companies. Crude oil will fall, less travel, flights cancelled.

No one's moving around much.

https://www.bbc.com/news/business-51353146

Coronavirus and oil: Why crude has been hit hard

The world's biggest oil producers could be about to slash output as they grapple with the fallout of the coronavirus.

Representatives of oil producers' cartel Opec and its allies are expected to meet this week as calls grow for action to support oil prices.

The cost of crude has hit its lowest level in a year after falling 20% since its peak in January.

Why have global oil prices fallen so much?

The spread of the coronavirus means the Lunar New Year holiday has been extended in much of China and travel restrictions are in place. As a result, factories, offices and shops remain shut.

That means the world's biggest importer of crude oil, which usually consumes about 14 million barrels a day, needs a lot less oil to power machinery, fuel vehicles, and keep the lights on.

The outbreak is likely to have a particularly large impact on demand for jet fuel as airlines around the world suspend flights to China, and travel restrictions within the country mean far fewer flights.

Bloomberg reported this week that China's daily crude consumption had slumped by 20%, the equivalent of the UK and Italy's oil needs combined.

In response, Asia's largest oil refiner Sinopec, which is owned by the Chinese government, has cut the amount of crude it is processing by about 600,000 barrels per day, or 12%, its biggest cut in more than a decade.

The scale of the fall has shocked the energy industry, according to Chicago-based oil analyst Phil Flynn: "We have not seen a demand destruction event of this scale that moves this quickly."

What does this tell us about the outbreak's impact on the global economy?

The sharp fall in oil demand is a clear symptom of a drop in business activity in China and a sign that the country's economic growth, which was already at a three decade low, will slow further.

Zhang Ming, an economist at government-backed think-tank the Chinese Academy of Social Sciences, has said the outbreak could push the country's annual economic growth below 5% for the first three months of the year.

China is the world's second largest economy and a key engine of global economic growth. Any negative impact in China is almost certain to ripple across the world.

This week the managing director of the International Monetary Fund, Kristalina Georgieva, said the epidemic was likely to slow world economic growth in at least the short term, but cautioned that it was still too early to tell further ahead: "We have to assess how quickly action is being taken to contain the spread of coronavirus and how effective this action is."

What are oil producers expected to do?

The world's biggest oil producers are said to be discussing more production cuts, which have been in place since 2016, to boost falling prices.

On Monday, Opec member Iran publicly called for measures to support oil prices as the coronavirus hit demand.

The statement came as so-called Opec+, which includes Russia, will reportedly discuss output cuts of between 500,000 and one million barrels a day at a meeting that is expected to take place this week.

Margaret Yang from CMC Markets said the market was expecting production to be cut by a 500,000 barrels a day, but added: "We won't rule out an even deeper cut should the situation worsen."

[Jamesc]

If they slash petrol prices at the pump

I will pump more.

[Albeniz]

23 hours ago, Watwheels said:

Sing more "Ai Piah Jia Eh Ngia".  Wayang here, wayang there. Can liao.

The Singlish version, "Upturn the down turn".

We still remember.

[noobcarbuyer]

4 minutes ago, Albeniz said:

The Singlish version, "Upturn the down turn".

We still remember.

https://youtu.be/CTMMRrxx-Ug

Very touching. This song has aged well indeed. 

[Albeniz]

5 minutes ago, noobcarbuyer said:

https://youtu.be/CTMMRrxx-Ug

Very touching. This song has aged well indeed. 

Absolutely inspiring.

[noobcarbuyer]

https://www.straitstimes.com/singapore/coe-prices-close-mostly-down-cats-a-and-b-down-by-5000-or-more

COE prices tumble sharply following coronavirus outbreak, Cats A and B down by $5,000 or more

[noobcarbuyer]

https://www.businesstimes.com.sg/government-economy/construction-workers-leave-of-absence-raises-fears-of-project-delays

Construction workers' leave of absence raises fears of project delays

BCA says public-sector project contractors may ask for more time; workers from approved non-China markets can mitigate shortage.

CONSTRUCTION players are bracing themselves for possible missed deadlines, with some workers stuck in mainland China or away from work and the epidemic shaping up to be a force majeure event.

[noobcarbuyer]

https://www.bloomberg.com/graphics/2020-global-economic-impact-of-wuhan-novel-coronavirus/

Charting the Global Economic Impact of the Coronavirus

By Hannah Dormido and Adrian Leung

February 5, 2020, 3:00 PM

As China struggles to contain the deadly new coronavirus, it’s becoming increasingly evident that the disruption to its economy will spill over to the rest of the world.

Provinces accounting for almost 69% of Chinese GDP will remain closed for more than an extra week after the annual Lunar New Year holiday, shutting factories, shops and restaurants, leaving ships trapped at port, and slamming household spending.

Travel restrictions limit the movement of more than 48 million people, with the crucial manufacturing and logistics hub of Wuhan—the epicenter of the virus—most impacted.

Hundreds of major manufacturers have had their links to the global supply chain severed. Robert Bosch GmbH, the world’s largest car-parts maker, had to shutter two factories employing a total of 800 people in Wuhan. Other auto part manufacturers, including Honda Motor Co. Ltd. and Nissan Motor Co. Ltd., have also closed their facilities in Wuhan.

And the disruption spreads from there. Key coastal exporting provinces are on an extended break and companies across the nation are taking precautions to stem the virus’s spread. China is the largest exporter of intermediate manufactured goods that can be resold between industries or used to produce other things, so its problems quickly reverberate through global supply chains. Indeed, global reliance on those products doubled to 20% from 2005 to 2015.

The Asian supply chain—which imports about 40% of its intermediate goods from China—has the biggest exposure, according to a Bloomberg Economics analysis based on the most recent detailed data released by the Organization for Economic Cooperation and Development. The U.S. imported about 10% of intermediate goods from Chinese factories.

Finding alternative supplies will be particularly hard for products in which China is a dominant supplier globally,” Bloomberg economist Maeva Cousin said.

Even in a containment scenario, China’s first-quarter GDP growth may slip to 4.5% year-on-year, according to an analysis by Bloomberg economists. That would be a drop from 6% in the final quarter 2019, and the lowest since data began in 1992.

The Chinese economy now accounts for about 17% of global GDP and it’s the largest trading partner for most of its neighbors. Those most dependent stand to be hit hardest. Hong Kong’s already struggling economy faces a 1.7 percentage point downdraft in the first quarter, according to Bloomberg Economics. South Korea and Vietnam—which benefit from Chinese tourism and embedded supply chains—would see a 0.4 percentage-point drag in near-term growth. Australia and Brazil, both commodity exporters to China, both may see growth 0.3 percentage below what it would have been without the virus.

While policy makers and CEOs say it’s too soon to assess the full impact, it’s becoming increasingly clear the blow will be global. Nike Inc. has closed about half of its company-owned stores in China and expects a “material” impact from the virus. Starbucks Corp. has closed about 2,000 of its cafes and Apple Inc. says its supply chain will be affected.

What happens next will depend on how quickly the virus can be contained.