The Chinaplas postponement comes amid some signs of growing difficulties in the manufacturing supply chains.
Fiat Chrysler Automobiles warned Feb. 6 it may be forced to close a European assembly plant in the next two to four weeks if China-based suppliers cannot reopen soon.
South Korean automaker Hyundai Motor Co. said Feb. 4 it was halting manufacturing at Korean plants because of supply chain disruptions caused by the virus, which has forced factories across China to close until at least Feb. 10 as Chinese authorities have extended the Lunar New Year holiday.
As well, the outbreak could reduce first-quarter vehicle output in China by 1.7 million units, or 32 percent, according to consultancy IHS Markit, in a report by Automotive News China, a sister publication of Plastics News.
A Feb. 5 report on supply chain disruptions from the virus, prepared by consulting firm Capital Economics, said the electronics and automotive sectors have among the most exposure to Chinese supply chains.
"The auto sector in North America ... has relatively large supply chain links with China, which is consistent with recent reports that U.S. car producers are just weeks away from shutting plants due to a dwindling supply of parts," the report said.
It noted that floods in Thailand in 2011 had a ripple effect on supply of specific auto parts worldwide and caused Toyota to cut production at plants as far away as North America.
Overall, though, the report said that manufacturing supply chains in developed economies have relatively less risk of significant coronavirus disruptions than manufacturing industries in emerging Asian economies.
"Industry-level data suggest that temporary disruption should have little macroeconomic impact in [developed markets]," the firm said. "But the effects are highly uncertain, and at very least there could be serious consequences for individual firms."
Plastics companies, including those with operations in Wuhan where the virus originated, said they continue to monitor conditions and be ready to resume production when they can.
Russell Johnson, president of China Array Plastics LLC, which has a molding plant in Wuhan, said none of its employees have contracted the virus. Wuhan and the surrounding Hubei Province have accounted for 618 of the coronavirus deaths, as of Feb. 7.
"It is hard to tell when production will resume," Johnson said, in an email. "Initial announcements were for 2/10/20, but that is subject to change. When it does resume, there will be backlogs in supply chains and logistics."
But he said the practice of the company, which is based in Pittsfield, Mass., is to order sufficient raw materials before the Chinese New Year "so it is in good shape to rapidly ramp up production once it's permitted."
"Our hearts go out to the people of Wuhan," said Johnson, who noted he's done business there for 40 years. "It's a resilient city with a long history of overcoming adversity."
Large China-based molder, mold maker and metals firm Eva Precision Industrial Holdings Ltd., which has factories throughout China, including in Wuhan, said that it is hopeful normal production can resume soon at its locations around the country.
"As our customers' assembly plants are also shut down, we do not encounter much pressure from our customers for the possible production delay caused by the coronavirus," said Francis Wong, spokesman for company, which is listed on the Hong Kong Stock Exchange. Eva is active in the auto and office equipment supply chains.
"At this stage, we do not see any adverse impact on future demand, and therefore we expect that our production can resume to normal as soon as the situation improves," he said.
In Germany, automotive molding company Webasto SE said Feb. 3 that coronavirus cases among its staff was causing it extend the closing of its Stockdorf, Germany, headquarters to Feb. 11. It first closed Jan. 29.
"This is in line with the longest incubation period of 14 days assumed by experts for the virus," the company said.
Webasto said seven of its employees tested positive for virus, up from four initially. They were infected after an employee from Webasto's China operation visited Stockdorf for meetings in late January and then, after returning home to China, tested positive for coronavirus.
One Chinese plastics machinery executive said he did not expect much direct impact on the overall industry's business climate from the Chinaplas postponement, but worried that if the coronavirus epidemic continued for several months there will be long-term economic repercussions.
"If the crisis lasts for more than three months, there will be a great impact to the Chinese economy and also in the long-term a negative effect towards China as one of the most important elements in the global supply chain," said Richard Yan, CEO of Guangdong Yizumi Precision Machinery Co. Ltd. "This will then be a big impact to the plastics industry in China."
