Coronavirus logjam hits Rio Tinto copper deliveries

It comes as the death toll from the epidemic continues to rise in China, with 97 new deaths and 2015 new cases emerging in the past 24 hours.


Fears about the disruption caused by coronavirus containment efforts on supply chains and the impact on demand for Australian commodities such as the steelmaking material iron ore have caused concern among investors and contributed to falls in the share prices of Australia’s China-reliant miners including Rio Tinto and BHP.

BHP, the biggest miner, confirmed on Sunday it was working with its customers in China to delay shipments of copper concentrate as plants were being shut down across the nation. In the hope of discouraging Chinese customers from declaring “force majeure” on contractual obligations due to the unforeseen virus outbreak, resources companies have been offering flexibility on deliveries.

“We are working closely with our copper customers as they return from Chinese new year,” a BHP spokeswoman said. “The company does not comment on individual customer arrangements and sources close to the company said at this stage, there’s been no impact to our production and product flows.”

Ports in China’s biggest steel production region, Hubei province, a major destination for Australian shipments of  iron ore, have been shut due to coronavirus. Prices for key commodities including copper, iron ore, nickel, aluminum and liquid natural gas (LNG), of which Australia is the world’s top exporter, have plummeted since the virus emerged.

Amid reports that the China National Offshore Oil Corporation, China’s biggest LNG importer, would not accept some imports, Graeme Bethune, of consultancy EnergyQuest, said Australian exports to China have been unaffected, “at least so far”.

“But as the largest supplier to China, any disruption to cargoes is likely to impact Australian projects,” Dr Bethune said.


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