Commodities

BASF diverts products from Chinese customers due to coronavirus disruption

Credit: REUTERS/ANNEGRET HILSE

German chemical giant BASF diverted some products to Europe from its Chinese clients following a coronavirus outbreak that has disrupted logistics and delayed factories from resuming operations.

BEIJING, Feb 14 (Reuters) - German chemical giant BASF BASFn.DE diverted some products to Europe from its Chinese clients following a coronavirus outbreak that has disrupted logistics and delayed factories from resuming operations.

Shanghai BASF Polyurethane Co, a joint venture of BASF and China's Sinopec Assets Management Corp and Shanghai Huayi Group Co SHHUA.UL, provisionally exported 3,150 tonnes of toluene diisocyanate (TDI), a raw material widely used in automobile and construction, to Europe, said China's customs on Friday.

The products were bonded to sell to BASF's Chinese clients who pushed back the orders amid the flu-like coronavirus that has killed 1,380 and infected more than 63,000.

The Chinese government has prolonged the Lunar New Year holiday for an extra week and encouraged companies to put workers returning for work from their hometown into quarantine for 14 days, in order to rein in the spread of the virus.

Some companies are still unable to resume production and some roads in the country remain blocked.

"Although the company had adopted emergency measures to reduce operation, inventory at the storage tanks reached the upper-limit," said the General Administration of Customs in a statement on Friday.

Chemical companies would face hefty costs and safety risks when shutting down and restarting in a provisional situation.

"We have been taking necessary precautions to ensure our operation stability at the coronavirus outbreak," said a spokeswoman at BASF in China.

"Although there have been individual supply or distribution interruptions in China, the overall impact to our operation is limited at the moment."

(Reporting by Muyu Xu and Tony Munroe, editing by Louise Heavens)

((muyu.xu@thomsonreuters.com; +86 10 56692117;))

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