While the Corona crisis in Europe starts to get worse, we still see positive developments in China. Every day it is getting easier to move products between provinces. Our local logistics partners expect further improvements in March. However, the whole Hubei province is still locked and cities like Wenzhou, Ningbo, Taizhou suffer tough restrictions.
The high number of new cases in Italy lead to lock downs of several cities. The European and US stock market reacted immediately. Although experts corrected the mortality rate of Covid19 from ~2% to ~0.5% we still feel that Europe is very much concerned about further outbreaks. There is also negative development in other Asian countries such as Korea where the number of new cases went up a lot recently, especially in Seoul.
We suggest that international companies increase their safety stock now to reduce supply chain risks. However, we also see sales of customers going down due to purchasing power loss at consumer side which relates to higher risks of keeping more feedstock for production. That makes the whole situation very complex. It is important to communicate in all directions of the supply chain to make reasonable decisions.