Tianjin blasts echo across economy

TIANJIN - With a swathe of one of the world's busiest ports in ruins, more than a billion dollars in losses, and some major multinational firms still unable to access their premises, the economic impact of the Tianjin explosions could reverberate for months.

Last week's blasts triggered a giant fireball and killed 114 people, sparking fears over toxic pollutants in the city's air and water, though authorities have insisted both are safe.

They also devastated a large area of the port of Tianjin, a key gateway to the world's second-largest economy and its biggest trader in goods.

Among the most striking images of the disaster have been those showing countless lines of imported cars burned to a crisp, with about 10,000 new vehicles near the blast site reportedly destroyed.

More than 150 companies in the Fortune 500 -- the US magazine's listing of the world's biggest firms -- have operations in the city, and its port is one of the 10 busiest globally.

The city has a population of 15 million people, almost twice that of London, and an economy roughly the size of the Czech Republic.

"Economic activity in Tianjin has yet to return to normal several days after the devastating explosions there," Capital Economics, a research firm, said in a note to clients.

"While most of the port has remained in operation, damage to warehousing and factory facilities has been severe," it added, warning that "disruption is likely to spread along supply chains".

No access

Some of the world's biggest companies have had their operations in the area affected, including Japan's Toyota, the number two global automaker.

Production at its plant in the area remained suspended Wednesday. Some 67 out of 12,000 employees at the factory, which produces models including the Corolla sedan, were injured.

A Toyota spokesman said production lines would stay closed through Saturday.

Pharmaceutical giant GlaxoSmithKline also has a plant in the area around the blast site, and a spokeswoman told AFP that it had been unable to access it to assess the damage.

US agricultural machinery manufacturer John Deere said its factory was damaged, Bloomberg News reported.

French carmaker Renault said Wednesday it was diverting its imports to Shanghai.

European aircraft manufacturer Airbus has a giant assembly plant in Tianjin, its only such facility in Asia and crucial to one of its most important markets.

Its staff were safe, it said, but it has offered to move employees to downtown Tianjin, away from the port area, and was analysing "the logistics situation".

"We are trying to find solutions," a spokesman added.

Soft drinks giant Coca-Cola and Japanese automaker Honda both told AFP they were evaluating the impact of the blasts.

Shares plunge
In a statement, the American Chamber of Commerce in China said it anticipate that Tianjin authorities would "rapidly and transparently complete their assessments and investigations, rebuild the Tianjin port and brand, and restore trust in the city".

According to the American Association of Port Authorities’ 2013 world ports rankings, the most recent available on its website, Tianjin ranked third globally for cargo volume on 477 million tonnes, and 10th for container traffic, with nearly 13 million twenty foot equivalent units.

Tianjin Port itself says that operations have returned to normal "except for those at the site or surrounding areas" -- which could cover a significant section of the facilities. It did not respond to requests for details from AFP.

Shares in Tianjin Port Development Holdings tumbled more than 13 percent in Hong Kong on Monday -- their biggest loss since 2009 -- and were down 2.9 percent to HK$1.36 on Wednesday.

Losses in the auto sector alone were estimated at $310 million, according to the People's Daily, the official mouthpiece of China's ruling Communist Party, and the Fitch ratings agency has warned that insurance claims resulting from the explosions could amount to $1.5 billion.

Analysts say the long-term effect will depend on how long port operations are disrupted, with investment bank Nomura saying in a note that while it did not expect a "significant" impact on the economy, "The key issue is whether this area will be affected permanently or temporarily."

Northern China faces "an immediate interruption in chemical and plastic supply" for up to a month, research firm IHS said.

"The port is responsible for the area covering Beijing and the surrounding area, so it's very important," said Tse Leung Yip, an associate professor at the International Centre for Maritime Studies at Hong Kong's Polytechnic University.

"Ships could berth nearby, but it's not very convenient, especially because Beijing really relies on Tianjin's port."

source: www.abs-cbnnews.com

China investigates Tianjin blasts, experts focus on chemicals stored at port

TIANJIN, China - Investigators searched for clues on Friday to identify what caused two huge explosions at a warehouse storing volatile chemicals at a busy port in northeast China, as foreign and local companies assessed the damage to their operations.

The blasts in the city of Tianjin on Wednesday night killed at least 50 people, including a dozen fire fighters, state media said. About 700 people were injured, 71 seriously.

Rescuers pulled one survivor from the wreckage on Friday, a city official told reporters. Columns of smoke from fires still burning rose from the blast site amid the devastation of crumpled shipping containers, thousands of torched cars and port buildings reduced to burnt-out shells.

The warehouse, designed to house dangerous and toxic chemicals, was storing mainly ammonium nitrate, potassium nitrate and calcium carbide at the time of the blasts, according to police.

Chemical safety experts said calcium carbide reacts with water to create acetylene, a highly explosive gas. An explosion could be caused if fire fighters sprayed the calcium carbide with water, they said.

The official Xinhua news agency has said several containers in the warehouse had caught fire before the blasts.

Lei Jinde, the deputy propaganda department head of China's fire department, a part of the Ministry of Public Security, told state-backed news website ThePaper.cn that the first group of fire fighters on the scene had used water.

"We knew there was calcium carbide inside but we didn't know whether it had already exploded," he said.

"At that point no one knew, it wasn't that the fire fighters were stupid," Lei said, adding that it was a large warehouse and they didn't know the exact location of the calcium carbide.

Xinhua has reported 18 firefighters remain missing, with 66 among the hundreds of people hospitalized.

David Leggett, a chemical safety expert based in California, told Reuters the acetylene explosion could have detonated the ammonium nitrate. The two blasts were about 30 seconds apart, the second much larger than the first.

"In my mind, the presence of ammonium nitrate makes it easier to explain the level of devastation," he said.

The explosions at the port, the world's 10th largest, were so big they were seen by satellites in space and registered on earthquake sensors.

A team from the International Atomic Energy Agency's Beijing environmental emergency response center, as well as 214 Chinese military nuclear and biochemical materials specialists, had gone to Tianjin, Xinhua said.

Several thousand residents were moved to 10 nearby schools after apartment buildings and homes were damaged, mainly by shockwaves from the explosions, it said.

ASSESSING DAMAGE

Foreign companies from across the globe were trying to determine the damage to their facilities in and around the port, a gateway to northeast China.

Toyota Motor Corp said windows were broken at its passenger vehicle assembly plant but no one was hurt. The Nikkei newspaper said numerous other Japanese companies sustained minor damage to their operations.

French carmaker Renault said more than 1,000 of its cars were damaged but no staff were hurt. Around 4,000 cars belonging to Hyundai Motor Co were at the site but damage had not yet been assessed, a spokesman said.

Mining giant BHP Billiton said its port operations and shipments were disrupted but its iron ore discharging berth had not been damaged.

Oil tanker arrivals and departures were also disrupted.

John Deere & Co, the U.S. farm and construction equipment maker, said several workers who were at home at the time were injured, some critically.

PACKAGING "SUB-STANDARD"

Xinhua identified the owner of the warehouse as Tianjin Dongjiang Port Ruihai International Logistics. The state-backed China Daily newspaper said its manager had been detained.

The Tianjin Maritime Safety Administration said the company violated packaging standards during a safety inspection two years ago.

Of 4,325 containers that were checked, five failed the inspection because packaging was sub-standard, according to a report posted on the administration's website in January 2014.

The company's website said it was a government-approved firm specialising in handling "dangerous goods". Phone numbers listed on its website were disconnected and an email to the company went unanswered.

President Xi Jinping said those responsible should be "severely handled".

Tianjin city officials had met recently with companies to discuss tightening safety standards on the handling of dangerous chemicals, authorities said.

Industrial accidents are not uncommon in China following three decades of breakneck economic growth. A blast at an auto parts factory in eastern China killed 75 people a year ago when a room filled with metal dust exploded.

Wednesday's blasts sent shockwaves through apartment blocks kilometres away in the port city of 15 million people. Internet videos showed fireballs shooting into the sky.

Anxious residents rushed to hospitals to seek news about injured loved ones. Dozens of police guarded the entrance of the TEDA hospital, a Reuters witness said.

The blasts shattered windows in buildings and cars and knocked down walls in a 2-km radius around the site.

source: www.abs-cbnnews.com