Retailers are preparing for the possibility of product shortages and drop in prices as Chinese factories cease operations. Commsec Senior Economist Ryan Felsman says that the severity of the impact felt by factory shutdowns remain unknown.

The tragic Coronavirus Covid-19 outbreak is having numerous effects on our Australian industries, however it could provide some good news amongst the bad for hour motorists.

Retailers are preparing for the possibility of product shortages and drop in prices as Chinese factories cease operations. Commsec Senior Economist Ryan Felsman says that the severity of the impact felt by factory shutdowns remain unknown.

“A lot depends on what happens as far as the contagion is concerned in China,” he told Storm Assist.

“We are seeing a shutdown of factories which produce toys and a whole host of products, so that could impact the broader supply chain where Australian retailers course their goods and services from.”

It is still unclear whether supply shortages will result in a rise in prices.

“There is a potential situation where Australians could start buying goods and services that are Australian made, rather than made in China,” Mr Felsman said.

Australian Exporters Are Feeling The Effects Of The Coronavirus Outbreak.

Exports to China make up 38% of the Australian export market, and expectedly the virus has caused reduced demand for many goods and services.

The seafood industry has been left reeling after china put a ban on live seafood trade, however the weak Australian dollar is providing some relief for exporters.

“The lower value of the Australian dollar against the greenback will provide some support for our exporters and make them more competitive, but a lot of that demand from China at the moment is being reduced on the back of concerns around the coronavirus,” Mr Felsman explained.

Meanwhile on the tourism side of things, the industry is struggling as result of the China travel ban. In the past year, Chinese tourists spent an estimated amount of $3 billion in Victoria alone.

However there is some good news for Australian motorists, it is predicted that we could see lower petrol prices as a result of the coronavirus, but the drop will not come immediately.

The cheaper prices will come from a drop in the price of oil, driven by a fall in demand from China, the world’s largest oil importer.

“With the crude oil price down around 18% since the coronavirus contagion took place what we’re expecting to see is the importation of that refined product from Singapore fall,” Mr Felsman said.

“We should probably see those prices potentially fall in the next few weeks.”

How Could Coronavirus Affect Solar Panel Pricing?

With coronavirus already topping headlines all around the world, it is no surprise that many industries have come to a halt.

Even the energy industry is being struck with the effects, with solar manufacturers in China suffering the consequences.

Coronavirus Covid-19 has never before been experienced by humanity. Person to person transmission can cause the disease to spread, however it is not the first coronavirus to hit the world. These new types of viruses generally begin and are transmitted from an animal such as SARS, MERS. Though coronaviruses are not the only diseases that are transmitted from animals or insects such as swine flu, Ebola, zika virus and avian influenza.

How Is Coronavirus Affecting Manufacturing?

Solar prices are expected to go up with the cost of models increasing, all as a result of the outbreak. This is due to a shortage in module glass wafers needed to create these new systems.

Areas that are known for generating these systems – such as Jiangsu, Guangdong, Anhui and Zhejiang – have extended their New Year’s deal in order to help deal with the impacts.

Decrease In Productions

China’s National Health Commission has stated that transport had been significantly impacted across numerous regions, directly affecting manufacturing across the board. Local governments are continuing to extend the holiday period to prevent any further spreading of the infection.

So What Does All This Mean For Solar?

Basically, this means that production rates for the vital materials have come to a stop, or at least significantly decreased. For those that are residing in affected areas are now under quarantine for at least 14 days, resulting in extensive factory usage plummeting.

A primary solar manufacturer in China who has chosen to remain anonymous, has told Storm Assist that coronavirus has caused significant strain on their factories. They noted that they will be operating at ‘very low rates’ and will not return to a ‘normal production rate’ in the immediate future’.

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