On August 10-11, Typhoon Lekima swept through China after hitting several eastern coastal provinces in Shandong, Jiangsu, Zhejiang, and Anhui. The Category 2-equivalent typhoon was the strongest storm to make landfall in China over the past five years with winds of up to 187 kilometers per hour (116 mph) that resulted in more than 56 people being killed and dozens reportedly missing.
The typhoon has severely impacted industrial operations in eastern China, disrupted key transport routes, and triggered closures at major ports due to landslides and flooding caused by heavy rainfall. More than 3,200 flights were canceled, including nearly 2,000 from Shanghai’s Pudong and Hongqiao International Airports, although some suspensions on high-speed railway lines have since been lifted. Latest figures have put economic damages suffered at around CNY 51.5 billion (USD 7.31 billion; EUR 6.59 billion), making it the second costliest typhoon in Chinese history.
Further heavy rainfall is anticipated after China’s Central Meteorological Observatory issued a blue warning that southern Shandong, northern Jiangsu, and northern Anhui can expect 8-10 thunderstorms from August 15-16.
Petrochemical, aluminum, and steel industries in Shandong impacted
Typhoon Lekima has notably halted production at petrochemical refineries and severely hampered land transportation in the eastern coastal province of Shandong. The province makes up around 25 percent of China’s petrochemical refining capacity and about 70 percent of independent refining capacity. Shandong-based aluminum and steel producing facilities have also been reportedly impacted by the typhoon.
Chemicals manufacturer Gulf Resources, a leading manufacturer for bromine, crude salt, and other specialty chemicals in China, announced that its Shandong-based facilities were heavily impacted by Typhoon Lekima. The company – which operates through three wholly-owned subsidiaries at Shouguang City Haoyuan Chemical Company Limited, Shouguang Yuxin Chemical Industry Co., Limited, and Daying County Haoyuan Chemical Company Limited – believes that all of its mines and factories sustained different levels of damage but that it would be difficult to assess the full extent until flood water recedes and electrical power is fully restored.
Several independent petrochemical refineries were forced to suspend plant and land transportation operations with no feedstock being fed into the units. Reports indicated that these refineries are mostly based in the Guangrao region which includes Jincheng Petrochemical, Yongxin Petrochemical, Luqing Petrochemical, Qicheng Petrochemical, Shanneng Petrochemical, Huaxing Petrochemical, Zhenghe Petrochemical, Shengxing Petrochemical, Hualong Petrochemical, and Hengrunde Petrochemical. Around a dozen independent refineries in Dongying and Zibo have also halted loading oil products onto trucks due to the flooding that resulted from the heavy rain.
China Hongqiao Group, the world’s largest producer of aluminum, reported that operations have resumed after minimal damages were found at its facilities. Although production at the company was not heavily impacted, logistics operations were still proving difficult for smelters in the aftermath of the floods. Hongqiao Group’s announcement comes in contrast to Shandong Weiqiao Pioneering – owned by the same group that controls Hongqiao – which confirmed that its aluminum plants were “immediately overwhelmed” by water flooding from the Xiaofu River on August 11. A subsidiary of Weiqiao reportedly moved to suspend production in order to protect its smelting facilities.
Steelmaker Shandong Chuanyang Group Company Ltd., whose facilities are based in Changshan Industrial Park, halted the operations of its plant including blast furnaces and rolling lines following the typhoon after it indicated that flood waters from the surrounding Xiaofu River, described as being waist-high, had affected the plant location. The company does not believe it will be able to resume operations in 10 to 15 days.
Major coastal ports suffer congestion
Several major coastal ports in China are suffering from congestion in the aftermath of Typhoon Lekima with Shanghai Waigaoqiao, Ningbo, Qingdao, Tianjin, and Dalian reportedly all affected. All ports and terminals were closed at Shanghai Waigaoqiao from August 9-11 which has led to heavy congestion and waiting times of around 2-2.5 days. The Port of Ningbo similarly suffered from heavy congestion with waiting times of around 1-1.5 days after all ports and terminals were closed from August 9-11. The Port of Qingdao was closed on August 11-12 with waiting times to berth of around 1-1.5 days.
Land transport disruptions has proven to be a difficult challenge for independent petrochemical refineries in Shandong as they are reliant on trucks for transporting and selling their oil and crude products. State-owned refineries have generally been less affected as they have the pipeline infrastructure to transport both crude and oil products.
Risk of prolonged production stoppages
As companies cope with the aftermath of Typhoon Lekima, customers with supply chain operations involving petrochemical, aluminum, or steel manufacturing in Shandong and other affected eastern Chinese provinces are advised to monitor Resilience360 for the latest updates as developments emerge. Companies should determine whether stocking up on essential materials or identifying alternative suppliers will be necessary in the event of prolonged production stoppages.
For port congestion, customers can continue to expect longer berthing and shipping times after Typhoon Lekima triggered the closure of several key coastal ports in eastern China that are particularly important for transporting crude and petrochemical products. In the case of land transport disruptions, companies may also need to consider identifying alternative routes in order to secure sufficient access to key materials.