COVID-19 Impacts Australian Minerals Shipments, an Industrial Info Market Brief

There was a saying that when the U.S. sneezed, Australia would catch a cold. What happens when China, Australia's biggest export partner, catches a virus? The recent outbreak of COVID-19 is hurting the demand for the countries top three exports: iron ore, coal and education.

The coronavirus outbreak has created a complexity on Australian energy and mineral shipments. The Australian government has imposed a 14-day quarantine on vessels that leave mainland China after 1 February bound for Australian ports. This has caused delays for vessels arriving from China to Australia mineral-loading terminals in Western Australia, Northern Territory and North Queensland. On the other hand, with the shutdown of a majority ports in China and a half-paralysed logistic industry in the country has delayed the shipments too.

Australia's major iron ore players, BHP, Rio Tinto and Fortescue Metals, have not yet reported on any major disruption to demand or shipments due to the virus outbreak. But both BHP and Rio Tinto are in talks with its Chinese customers to delay shipments and are prepared for some short-term impacts due to supply chain issue. BHP also mentioned that the demand for resources could be hit by the virus in China unless the epidemic is contained by the end of March.

China's domestic coal mines are struggling to ramp up production due to the ongoing epidemic. This situation may seem positive for Australia coal miners, but in reality, it may be challenging to take this advantage due to logistic issues.