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L’Oreal sees China virus weighing on sales in Asia

 Maybelline maker L’Oreal  forecast on Thursday that China’s coronavirus health crisis would have a short-term hit on its Asian business, its biggest sales driver, though the group said it still expected to outperform cosmetics rivals in 2020. Thriving appetite from Chinese consumers for luxury creams such as L’Oreal’s Lancome range has fueled sales growth at the French firm, which exceeded expectations in the fourth quarter. Its rival Estee Lauder) has also benefited from this trend and performed strongly in the last three months of 2019, though the Clinique-owner trimmed its profit forecast for 2020 on Thursday, citing the virus impact. The outbreak has killed over 500 people in China so far, and is leading to travel restrictions that could affect beauty sales in airport duty free lounges. L’Oreal’s Chief Executive Jean-Paul Agon said the health scare would have “a temporary impact on the beauty market in the region and therefore on our business in China and travel retail in Asia, even if it is too early to assess it.”

Asia Pacific accounts for nearly 35% of L’Oreal’s revenue.

The group had 12,000 direct employees in China, Agon said in an interview with France’s Les Echos interview on Thursday, and another 12,000 worked selling its brands in shops. Its Chinese sites that were closed during extended Lunar New Year holidays were due to reopen on Monday, Agon said, though he did not specify what these were and whether they included factories. L’Oreal will hold a news conference on Friday. Concern over the virus overshadowed a strong set of results, as L’Oreal made progress in the fourth quarter even in its most sluggish division, home to mass market products sold in supermarkets like Garnier shampoo. Business across Asia picked up pace in the period despite street protests in Hong Kong that forced some retailers to close and caused some luxury goods firms’ revenues there to plummet. It reported a bit of a blip, however, in the United States where demand for make-up has dropped off, and its North American sales fell 2% from a year earlier on a like-for-like basis, which strips out acquisitions and currency swings. L’Oreal said total fourth-quarter revenue rose 11.4% to 7.9 billion euros ($8.67 billion), up 9.6% like-for-like. That was up from like-for-like growth of 7.8% in the previous quarter. For the whole of 2019, L’Oreal’s net profit rose 9.3% to 3.98 billion euros, and its operating margin increased to 18.6%, from 18.3% a year earlier. Agon said L’Oreal was confident of outperforming the broader beauty market in 2020. It grew around 5.5% in 2019, according to L’Oreal estimates.

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China’s coronavirus disrupts global container shipping trade

* World depends on container trade for consumer goods

* Some ships being re-routed to South Korean ports

* Some analysts say disruptions could continue into March

By Jonathan Saul and Lisa Baertlein

LONDON/LOS ANGELES, Feb 6 (Reuters) – China’s fast-spreading coronavirus is throwing the global container shipping trade out of sync, with lines re-routing cargoes and reducing calls to Chinese ports, setting the scene for months of delivery delays ahead, industry sources said. The spread of the deadly virus has shut down cities and factories in China and disrupted global air travel.  China’s decision to extend its Lunar New Year holiday period until Feb. 10 has compounded logistical complications, despite its ports staying open. China is a vital link to the container sector, transporting everything from fresh food to phones and designer clothes as well as industrial parts. The world’s top container lines Maersk, MSC and CMA CGM have all reduced calls to China, known as blank sailings, the companies said in recent days. Exports of goods from China have already been hit, with broader repercussions. Hyundai Motor has said it will suspend production in South Korea, its biggest manufacturing base, because of a lack of spare parts. Disruptions to sea cargo flows have compounded an already pressured situation for shipping lines as they struggle with weaker markets and higher costs from new International Maritime Organization (IMO) regulations on low sulphur fuel. Shipping and trade sources say regular schedules are also being affected by truck and port workers in China stuck at home or away from their places of work. In addition, warehouses around dock areas in China are not fully working. This has led to ships being diverted from China to ports in South Korea. South Korea’s Busan port, one of the world’s major container terminals, has already seen a spillover with container capacity at 78% and could rise further from its usual level of 70%, a Busan port official said. “Shippers are parking cargo at our ports, so later, perhaps when the coronavirus dies down and the level of cargo (backlogged in China ports) decreases, they can deploy a small ship to carry these cargo to their destination in Chinese ports,” the official said If container levels increased to over 80% it would be difficult to run the port efficiently, the official said. While China’s Lunar New Year period usually leads to a slowdown, the virus is expected to further reduce cargo volumes. Lasse Kristoffersen, chief executive of Norwegian shipping group Torvald Klaveness, told Reuters that 25% of its container fleet was affected as sailings were cancelled. “This is largely due to lower volumes on China. This is normal during Lunar New Year, but it seems to us that the volumes are lower than normal for this period – likely impacted by the coronavirus,” he told Reuters. U.S.-based shipping industry consultant Jon Monroe, whose company is active in China, said that blank sailings in February were higher than usual. Even when the impact of the virus dies down there will be a rush to ship goods in and out of China, creating more logistical problems. “Everybody will be making up for lost time. This is really the perfect storm,” he said. Shipping consultancy Alphaliner said extended holidays and emergency measures to tackle the virus were estimated to reduce cargo volumes at Chinese ports including Hong Kong by over 6 million TEUs (20 foot equivalent units) in the first quarter of 2020 and forecast global container throughput growth would fall by at least 0.7% in 2020. China’s container throughput rose last year by over 4% to 261.25 million TEU. “Since these extended void sailing programmes on long-haul services (by container lines) are slated to continue until mid-March, any cargo volume recovery could be negatively affected, even after the end of the holidays,” Alphaliner said. Executives at seaports on the U.S. West Coast, which handle the majority of Chinese imports into the United States, are preparing for expected disruptions. “You’ll see soft levels of imports go into the month of March,” Port of Los Angeles executive director Gene Seroka told Reuters. (Additional reporting by Roslan Khasawneh in Singapore, Hyunjoo Jin and Joyce Lee in Seoul and Gus Trompiz in Paris, Editing by Veronica Brown and Susan Fenton)

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Airbus halts output at Tianjin assembly plant due to coronavirus

https://youtu.be/w7rsyRx-700

PARIS (Reuters) – Airbus (AIR.PA) has prolonged a planned closure of its final assembly plant in Tianjin, China, as a result of the coronavirus emergency, the planemaker said on Wednesday, adding it was monitoring for any signs of impact on deliveries. It appears to be the first significant impact on aerospace production since the coronavirus outbreak, whose death toll has risen to nearly 500. Airbus has said it is planning to raise output from the plant to six A320-family aircraft a month, just over 10% of Airbus narrowbody production, in early 2020 from a previous rate of four. “The Tianjin final assembly line facility is currently closed,” Airbus said in a statement. “Airbus is constantly evaluating the situation and monitoring any potential knock-on effects to production and deliveries and will try to mitigate via alternative plans where necessary.. Industry sources said the Tianjin plant had been closed along with many businesses over the Chinese New Year but was due to reopen at the end of January. The reopening has been suspended due to the virus outbreak hitting the logistics involved in keeping the line open. Tianjin is one of two Airbus aircraft final assembly lines outside Europe, alongside a sister plant in Mobile, Alabama.

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Adidas closes “considerable” number of stores in China due to coronavirus

BERLIN (Reuters) – German sportswear company Adidas (ADSGn.DE) on Wednesday said it was temporarily shutting a “considerable” number of its stores in China due to the coronavirus outbreak.  The company said the fast-spreading virus was having a negative impact on its business but added that it could not yet assess to what extent. Adidas has about 12,000 outlets in China, including franchise stores. Adidas saw sales growth slow to 11% in China in the July-September period from 14% in the second quarter. Several retailers have warned that coronavirus is taking its toll, including Nike Inc (NKE.N) and Hugo Boss (BOSSn.DE), which have both closed some stores in China. Adidas’s German rival Puma (PUMG.DE) said that factories will remain closed until Feb. 10. “We have so far not been informed of any production or shipment delays. A number of stores – both owned and operated and partner stores – remain closed for the time being due to local regulations”, a Puma spokesman said. “It is too early to comment on the effects of these closures”, he added. The group cancelled or postponed all Puma events in China in February including training and marketing meetings and put travel restrictions in place. Its Shanghai office remains closed until February 9. Nick Note: My opinion this is the first of many shutdowns in China and it will have a devastating effect on US corporation and the US supply chain. By extension when this hits if it hits as i believe.  it will slam the US stock market like a stalled pickup truck stuck on the tracks  at a oncoming freight train crossing.

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Coronavirus turmoil spreads to airline cargo operation

MADRID/SEOUL (Reuters) – The air transport sector, already reeling from China passenger flight cancellations designed to slow the spread of coronavirus, now faces mounting freight and logistics disruption with broader repercussions at stake, economists warn. The thousands of dropped flights have already slashed “belly cargo” capacity in airliner holds, with operators like Lufthansa (LHAG.DE) also scaling back freighter services in response to crew health concerns and uncertain demand. The crisis has dimmed hopes of a rebound for air cargo after its worst year in the decade since the financial crisis, the International Air Transport Association, a group of 280 global airlines, said on Wednesday. Air cargo is widely seen as an early warning system for blips in global trade and business confidence that would not otherwise be easily visible for weeks or months. “We are in unknown territory with respect to the eventual impact of the coronavirus on the global economy,” IATA said. “With all the restrictions being put in place, it will certainly be a drag on economic growth.” Early victims of supply-chain breakdowns include Hyundai Motor Co. (005380.KS), forced to halt South Korean car production as flows of Chinese components dried up. But with manufacturing paused for the Chinese New Year – and planned stoppages at Airbus AIR.FR and elsewhere now being extended – it may be weeks before economies feel the full brunt of the freight upheaval currently playing out. As things stand, “many supply chains are essentially halted, so there’s nothing to transport,” Bernstein analyst Daniel Roeska said. “If you’re ordering people to stay in their houses it’s difficult to keep factories running.” Yet when output and freight demand pick up, operators once blighted by excess capacity may have the opposite problem, with sudden bottlenecks threatening customers and the wider economy. This week will see 25,000 fewer flights operated to, from and within China than a fortnight ago, aviation data firm OAG said, with services suspended by 30 airlines.

Some firms seeking to fly goods out of China are already finding prices prohibitive. One Shanghai-based e-commerce consultant told Reuters certain clients had delayed shipments after quoted cargo rates rose fivefold.

Freight forwarders are warning of “increased rate volatility for air freight, due to reduced belly cargo capacity,” according to Panjiva, the supply-chain research unit of S&P Global Market Intelligence. Air cargo represents less than 1% of global trade by tonnage but 35% by value, or about $6 trillion a year, Boeing says. In normal times about half that volume is carried in passenger jet holds, leaving China more dependent on freighter operations in the wake of the flight suspensions. Major air cargo carriers said they had no immediate plans to add China freighter services to replace the lost capacity. Korean Air Lines Co Ltd (003490.KS) and Japan’s ANA Holdings Inc (9202.T) both said higher China-bound shipments of medical supplies including masks had partially offset a decline in fresh food such as lobster and salmon and other goods. Germany’s Lufthansa said it had cut its freighter schedule to allow pilots to spend the night in Russia rather than China. The reduction also reflects lower demand, a spokesman said. Repercussions could be worsened by marine shipping cuts, S&P said – with Maersk, CMA-CGM and ONE among container lines that have discussed reducing Asia-Europe capacity. Delays to surface shipping may cause pockets of air freight demand as suppliers re-route goods to avoid delay penalties. “One of our customers is moving a shipment to air freight because they do need goods before the intended arrival date,” said Ben Bradley, a rail operator at Davies Turner in Britain.He was referring to the cancellation of a Feb. 15 rail shipment to London from Wuhan, the city at the center of the outbreak. Once Chinese production recovers, dedicated cargo carriers like United Parcel Service Inc (UPS.N), FedEx Corp (FDX.N) and DHL stand to benefit most, said Cowen analyst Helane Becker. Nick Note: I see the whole China supply chain collapsing if this continues much longer……

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Brexit trade tensions rise as UK ‘hires more patrol boats

Brits  to keep out EU fishing fleet ahead of showdown over access to British waters

  • EU access to UK waters will be crucial issue during post-Brexit trade discussions
  • Brussels is adamant European trawlers must be able to continue to fish near UK 
  • But government said priority in UK fishing grounds will be given to British boats

Britain is bolstering the ranks of its fishing police force ahead of a potential showdown with the European Union over post-Brexit access to UK waters.  Fishing rights have already emerged as one of the key battlegrounds in future partnership talks between the UK and the EU. Brussels is adamant that there must be ‘reciprocal access’ on fishing so that existing arrangements which allow European trawlers to fish near the UK can continue. But the government is equally adamant that who fishes in British waters will solely be a decision for ministers and priority will be given to British boats.

+The right of EU ships to fish in British waters after Brexit will be a key issues during trade talks between the UK and the bloc Boris Johnson, pictured in Downing Street today, has said British fishing vessels will be given priority access to British fishing grounds after Brexit. The EU has said it wants ‘reciprocal access’Britain has also resisted the idea floated by senior figures in the bloc that UK giveaways in areas like fishing could be met with EU concessions in others areas like access to financial markets.  The UK is now putting in place additional measures to make sure it is able to enforce whatever new fishing rules are rolled out by boosting the number of ships it can call on to patrol its coastal waters. The Department for Environment, Food and Rural Affairs has reportedly hired two extra ships to provide additional help to the Royal Navy Fishery Protection Squadron.

Meanwhile, a further 22 boats are on standby to help out if they are needed and more than 30 extra enforcement officers have been recruited to inspect fishing vessels and make sure they have the right to be in UK waters. The RNFPS currently has four River-class offshore patrol vessels and one helicopter so the additional boats – first reported by Politico – represents a significant increase in capability.  Boris Johnson said in a big Brexit speech on Monday that the UK is ‘ready to consider an agreement on fisheries, but it must reflect the fact that the UK will be an independent coastal state at the end of this year 2020, controlling our own waters’.  He added: ‘And under such an agreement, there would be annual negotiations with the EU, using the latest scientific data, ensuring that British fishing grounds are first and foremost for British boats.’  But the EU’s chief Brexit negotiator Michel Barnier said there needed to be ‘reciprocal access to our territorial waters and our markets’. He also insisted that ‘agreement on fisheries will be inextricably linked to the trade agreement’.

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EIA Weekly Petroleum Status Report

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.4 million barrels from the previous
week. At 435.0 million barrels, U.S. crude oil inventories are about 2% below the five year average for this time of year.
U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ending January 31, 2020, which was 48,000 barrels per day more than the previous week’s average. Refineries operated at 87.4%of their operable capacity last week. Gasoline production increased last week, averaging 9.9 million barrels per day. Distillate fuel production
decreased last week, averaging 5.0 million barrels per day. U.S. crude oil imports averaged 6.6 million barrels per day last week, down by 46,000 barrels per day from the previous week. Over the past
four weeks, crude oil imports averaged about 6.6 million barrels per day, 12.3% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 676,000 barrels per day, and distillate fuel imports averaged 194,000 barrels per day. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.4 million barrels from the previous
week. At 435.0 million barrels, U.S. crude oil inventories are about 2%below the five year average for this time of year. Total motor gasoline
inventories decreased by 0.1 million barrels last week and are about 4% above the five year average for this time of year. Finished gasoline
inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 1.5 million barrels
last week and are about 4% below the five year average for this time of year. Propane/propylene inventories increased by 0.6 million barrels
last week and are about 37% above the five year average for this time of year. Total commercial petroleum inventories decreased last week by 0.9
million barrels last week. Total products supplied over the last four-week period averaged 20.3
million barrels per day, down by 4.7% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.7
million barrels per day, down by 3.1% from the same period last year. Distillate fuel product supplied averaged 3.9 million barrels per day over
the past four weeks, down by 12.4% from the same period last year. Jetfuel product supplied was down 0.5% compared with the same four-week period last year.The West Texas Intermediate crude oil price was $51.58 per barrel onJanuary 31, 2020, $2.51 below last week’s price and $3.71 less than
a year ago. The spot price for conventional gasoline in the New York Harbor was $1.534 per gallon, $0.025 less than last week’s price but $0.071 above a year ago. The spot price for No. 2 heating oil in the New York Harbor was $1.595 per gallon, $0.114 below last week’s price and $0.286 under a year ago. The national average retail regular gasoline price was $2.455 per gallon on February 3, 2020, $0.051 lower than last week’s price but $0.201 over a year ago. The national average retail diesel fuel price was $2.956 per gallon, $0.054 per gallon below last week’s level and $0.010 under
a year ago
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Tesla slumps over 19% amid Model 3 delay

Tesla Inc. extended losses on Wednesday as it dropped more than 19% following a coronavirus-caused delay of China-made Model 3 delivery. The company had its largest fall on record after it surged nearly 100% since the beginning of the year. Tesla’s equities hit the all-time high on Tuesday, reaching a $968.99 per share valuation. The company’s stocks lost 17.20% at 1:33 pm ET to trade for $735.56 per share.

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Wuhan coronavirus crematoriums ‘working 24/7′ burning ‘100 bodies a day’ insider claims

A worker at a funeral home in Wuhan has reportedly made the disturbing claims – as Chinese authorities have insisted the official death toll remains at just under 500. Chinese crematoriums are working “24/7” as they burn bodies of people killed by the coronavirus in Wuhan, it has been claimed. Workers are reportedly working flat out and without break as they are constantly sent the bodies of victims – it is claimed they have been burning 100 bodies every day since January 28. One insider, who is said to work at a funeral home in Wuhan, has reportedly revealed the long working hours to deal with the surge of coronavirus deaths.Crematorium workers are reportedly working in makeshift protective suits and masks as they handle the bodies. It comes after Chinese-state media issued a decree banning funerals and demanding near instant cremation for victims. Wuhan is epicentre of the outbreak, being the first city in China to be placed under full quarantine. Disturbing accounts and reports have been emerging from the city, leading to speculation that the death toll is being downplayed by the Communist Party. Fears thick ‘death’ smog over Wuhan confirms China is burning coronavirus bodies. The worker said staff are exhausted and are working without proper equipment. Identified only as Mr Yun, he said: “90 percent of our employees are working 24/7 … we couldn’t go back home.” Chillingly, he claimed: “All Wuhan cremation chambers are working 24 hours. He alleged “every day, we need at least 100 body bags” – which is much higher than the official death toll which is only now nearing 500. And the New York Times reports the residents in Wuhan now do not believe the Chinese government’s official death toll. It is claimed people with the symptoms are being turned away by overstretched hospitals. The health care system is reported to be completely overwhelmed, with doctors also having a shortage of testing kits. Chinese authorities are also now threatening to arrest people who spread “unofficial” information about the coronavirus. He said: “We can’t stop because we can’t leave the bodies outside for a long time. “For us who transfer the bodies, we don’t eat or drink for a long time in order to preserve the protective suit, because we need to take off the protective suit whenever we eat, drink, or go to the bathroom. “The protective suit can’t be worn again after being used. And another worker is reported to have said: “All male staff at our funeral home are picking up and moving bodies now, and female staff are answering the phones, disinfecting the funeral home, and so on.“We work 24 hours. We are very tired.” He claimed they do not have the proper equipment to disinfect the facility. They are having to wearing two layers of dipsoable gloves as they don’t have rubber gloves, and are having to wear swim goggles. He said: “We are on the verge of collapsing. We really need help.” Nick Note. I put this story in the near fake news slot. I reported it because it has some credibility……..

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Trapped on virus-ravaged cruise ship, shocked passengers struggle to keep spirits up

It ain’t the love boat anymore…. Try Sick Ship

YOKOHAMA, Japan – Quarantined for two weeks on a cruise ship ravaged by coronavirus, the Britons on board have only one option: keep calm and carry on. David Abel and his wife Sally are still smiling, for now. Their friends Alan and Wendy Steele are going “stir crazy” trapped in their cabin – although they say they are not worried about catching the deadly illness. Still, this was not how the Steeles planned to spend their honeymoon. Many of the 2,666 passengers and 1,045 crew members on the Diamond Princess are struggling to keep their spirits up, after the luxury liner was quarantined off the Japanese coast Wednesday, with passengers forbidden to leave their cabins. Last Saturday, a man from Hong Kong who had spent five days aboard the ship was confirmed as having contracted coronavirus. On Wednesday, with the ship docked at the port of Yokohama, Japan’s Health Ministry said nine other passengers and one Filipino crew member had tested positive. The nine passengers who tested positive – two Australians, three from Japan, three from Hong Kong, and one American – have been transferred to hospitals, but none is in serious condition, said Japanese Health Minister Katsunobu Kato. They were among 31 people deemed at high risk who were initially examined for the virus, while samples from 242 other people are still being tested. For those left on board, there is nothing to do but sit in their cabins, wait for meals to be delivered, watch television or a choose from a limited selection of movies on demand. Those lucky enough to have a balcony can at least sit in the sun, look at the ocean and talk to their neighbors. Abel said his greatest sympathy is with those confined to the inside cabins. “Can you imagine? It would be liked being locked in a wardrobe, wouldn’t it?” he said. “No fresh air. No natural light. It really must be a living hell for them.” Other passengers tweeting from the ship or talking to Japanese media reflected the anxiety on board. “Still shocked and scared. But better precautions. Have faith in the crews and captain,” tweeted Yardley Wong, who describes herself as a Christian entrepreneur from Hong Kong. Life on board had been winding down on Tuesday as medical staff went through the boat interviewing and testing passengers, with the casino closed and evening’s main entertainment show canceled. But guests still gathered for dinner, and smaller events continued where passengers mingled, hours before the captain ordered all passengers to go to their cabins and stay there. A person with the Twitter handle @daxa_tw and tweeting in Japanese has been posting videos and photos of life on board. “As for myself, I am going to assume that I have already been infected,” he tweeted. In a direct message, he said he feared the number of infected people could grow significantly “because this is a cruise whose main purpose is socializing.” Calls to room service go unanswered as crew members struggle to deliver basic meals. That means passengers cannot get an alcoholic drink. Breakfast for many arrived about 11 a.m. – a problem for Abel, who has diabetes and needs to eat regularly to maintain his blood sugar levels. Passengers had received just one cup of coffee by early afternoon. On orders of Japan’s Health Ministry, they have been told they are not allowed to smoke, a problem for Wendy Steele, a 51-year-old nurse from Wolverhampton in Britain. For lunch, they were sent stale bread with ham, he said, a far cry from the meals that had been offered throughout the cruise.

“We’re basically being treated like we’re prisoners and criminals at the moment; that’s how we feel,” he said. “There’s nothing coming down the tannoy telling us when we’re going to be released onto the ship,” he added, referring to the public address system.

Negin Kamali, a public relations officer for Princess Cruise Lines, which is owned by British-American cruise operator Carnival, said the onboard guest experience team was working on developing “in-cabin activities and entertainment,” adding that the passengers will be allowed to leave the boat after 14 days. Nick Note: It sounds like the Bounty to me. With Captain Blythe, the only thing missing is the bread fruit. I am told their are 2 cruise ships under quarantine and two others being monitored. As you know i hate the flying virus filled  test tubes called jetliners. And i have never been in favor of the floating barf barges. ALL have issues with to many damn people in confined spaces with bacteria laden recirculated air..