...That is a major challenge for the supply chains that have developed in recent decades to deliver a constant supply of the materials that make Chinese factories hum.
Commodities markets have tumbled as those factories idled. Iron ore is down more than 10 percent this year. Copper is down about 8 percent, as is nickel, a key ingredient for stainless steel. Zinc and aluminum are both down more than 5 percent in 2020.
“There is a big drop in consumption and you need storage space,” said Harry Tchilinguirian, head of commodity strategy at the French bank BNP Paribas, in London. “And if you don’t have storage space that’s one of the reasons why the buyers have invoked this clause.”
One of China’s largest importers of liquefied natural gas, China National Offshore Oil Corporation, or CNOOC, was one of the entities to invoke a “force majeure” clause, according to multiple news reports. Asian gas prices tumbled in response; benchmark prices for North Asian liquid natural gas are down more than 30 percent in 2020....Developing...