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Transport disaster strikes Black Friday purchasing amid Europe, China floods

TOPSHOT – The aerial photo shows an area in the Blessem district of Erftstadt on July 16, 2021, which was completely destroyed by the flooding.

SEBASTIEN BOZON | AFP | Getty Images

The 2021 Christmas shopping season could be impacted by out of stock and shipping delays as recent floods in Europe and China exacerbate already tight global supply chains.

Western Europe and the Chinese province of Henan – an important transport hub and headquarters of several large companies – are grappling with the aftermath of devastating floods.

The disasters damaged railways in both regions, which are used to deliver goods and raw materials. Water entered industrial areas and damaged facilities, machinery and warehouses, supply chain industry companies told CNBC.

“Black Friday and the holiday season for which products (and raw materials) are staged will have the brunt of the impact,” Pawan Joshi, executive vice president of supply chain software company E2open, told CNBC in an email.

“Consumer electronics, dorm furniture, clothing and appliances will all continue to be in short supply as shopping starts early in school and enters the main Christmas shopping season,” he said.

Delays in the distribution of raw materials needed to manufacture goods will have a cascading effect and disrupt supply chains “for weeks and months,” Joshi said.

The flood has the potential to take another blow to the auto industry, which is already suffering from a semiconductor shortage.

Pawan Joshi

Executive Vice President, supply chain software company E2open

Several companies, including Germany’s largest steel manufacturer Thyssenkrupp, have declared force majeure. A force majeure event occurs when unforeseeable circumstances, such as natural disasters, prevent a party from fulfilling its contractual obligations and release it from sanctions.

Some of the industries hardest hit by the floods include automobiles, technology and electronics, according to those CNBC spoke to.

Car production started again after lack of chips

Auto production is likely to be affected by production delays as many of the world’s largest automakers and their suppliers are based in the flood-ravaged regions.

“The flood has the potential to take another blow to the auto industry, which is already suffering from a semiconductor shortage,” said Pawan.

Production facilities in Germany, the Netherlands, Luxembourg and Belgium are expected to bear the brunt of the flood damage, supply chain risk management company Everstream told CNBC via email. Many suppliers that provide specialty parts for the automotive, technology and aerospace industries are based there, said Shehrina Kamal, vice president of Intelligence Solutions at Everstream.

“When the floods receded, most major highways and roads were expected to be cleared this past weekend,” she said.

“Given that some companies have issued profit warnings and even declared acts of God, the effects of the flood are likely to drag on through supply chains for several weeks,” concluded Kamal.

Zurich-based company Klingelnberg, which makes transmission components, warned that the damage to its Hückeswagen plant in Germany could affect its sales targets for 2021.

Disruption of copper is bad news for electronics

The floods could also disrupt supplies of copper, which is used in many products from electronics to electric vehicles.

Flood-hit Henan Province in China is a major center of copper production, said Vivek Dhar, a commodities analyst with the Commonwealth Bank of Australia.

Copper prices rose sharply last week on delivery concerns, he said, as Henan has seen strong growth in copper smelting in recent years.

“Hopes for copper demand are linked to the rebuilding of damaged infrastructure in central China. China’s electricity sector is a particularly strong driver of copper demand,” Dhar wrote in a note last week.

In Europe, Aurubis GmbH – a provider of high-precision copper wires for the electronics and electrical appliance industries – declared force majeure in the case of deliveries after extensive floods in their plant, according to Everstream Analytics.

Read more about China from CNBC Pro

Meanwhile, in Henan’s capital, Zhengzhou, the disruption could hit a wide range of industries, from automotive to pharmaceuticals to biotechnology, said Ryan Seah, APAC intelligence analyst at Everstream.

“Zhengzhou is a major transportation hub and one of the most important cities in China along the Belt and Road Initiative,” said Seah, referring to China’s gigantic infrastructure plan that spans several countries and continents. He added that the city is home to 91 China-listed companies and a variety of sectors.

Zhengzhou is also home to a large factory operated by Hon Hai Precision Industry, also known as Foxconn. It is the world’s largest assembly plant for Apple’s iPhones. Foxconn previously told CNBC that it had “activated an emergency plan for flood control measures at this location.”

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Floods in Europe and China disrupt international delivery, provide chains

The floods in China and Europe are another “body blow” for global supply chains, the CEO of a shipping company told CNBC on Monday.

“Seldom goes a week without something new,” says Tim Huxley, CEO of Mandarin Shipping.

Shipping has already experienced massive disruptions this year. As parts of the world recovered from the pandemic, increased spending resulted in a shortage of containers, causing delays and driving up prices.

In April one of the largest container ships in the world got wedged in the Suez Canal and stopped traffic for almost a week. The waterway is one of the busiest in the world, carrying about 12% of all trade.

In June, a spike in COVID cases in southern China caused further delays in the region’s ports, pushing shipping prices soaring again.

“Broken railway connections” due to floods in Europe

Heavy rains and floods have devastated parts of Western Europe. Some of the worst floods occurred in Germany and Belgium. Parts of Switzerland, Luxembourg and the Netherlands are also affected.

“This will really disrupt the supply chain because the rail links have all been cut,” Huxley told CNBC’s Squawk Box Asia.

These include railways from the Czech Republic and Slovakia to the German ports of Rotterdam and Hamburg, which are “seriously disrupted”.

“And that will delay freight movements back and forth,” he said. “This is going to really mess up the industry.”

Huxley pointed to Thyssenkrupp and stated that the German steel giant could not get any raw materials because of the flooding.

“That will ultimately affect industries like automotive, home appliances and the like,” he said.

S&P Global Platts reported, citing a customer letter, that Thyssenkrupp had declared force majeure on July 16. A force majeure event occurs when unforeseeable circumstances, such as natural disasters, prevent a party from fulfilling its contractual obligations and release it from sanctions.

A source at the company’s plants told S&P Global Platts that parts of the railroad in Hagen were “missing”, adding that it was even more difficult than before to get trucks for delivery. Hagen is a city in western Germany that has been hardest hit by the floods.

Floods in inland Henan cut the supply of wheat and coal

The disruption caused by the floods in China’s Henan Province, meanwhile, is made worse by the province’s being inland, Huxley said.

Read more about China from CNBC Pro

The interruption of the railway will again have “great effects”, he said.

“Of course that will affect the shipping, that will increase the shipping costs,” said Huxley.

The distribution of wheat and coal is affected, said Huxley, who pointed out that Henan is China’s “bread basket” and has produced 38 million tons of wheat this summer.

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Tons of Lacking and Scores Useless as Raging Floods Strike Western Europe

BERLIN – After a day of frantic rescue efforts and orders to evacuate cities that were quickly filling with water released from violent storms, German authorities said late Thursday that after confirming numerous deaths, they were unable, at least 1,300 people to explain.

That staggering number was announced after rapidly flowing water from swollen rivers poured through towns and villages in two western German states, where news outlets said more than 80 people had died and other fatalities were expected in the hardest-hit regions.

With communication severely hampered, the authorities hoped the missing people would be safe, if out of reach. But the storms and floods have already proven deadly.

At least 11 other people are believed to have died in Belgium, according to the authorities, who also ordered residents of downtown Liege to evacuate when the Meuse, which flows through the center, overflowed.

The storms and the resulting floods have also struck the neighboring countries of Switzerland, the Netherlands and Luxembourg, as a slowly moving weather system threatened to bring even more rain to the flooded region overnight and until Friday.

The devastation caused by the storm came just days after the European Union announced an ambitious plan to move away from fossil fuels over the next nine years in order to make the 27-country bloc climate-neutral by 2050. Early on, politicians drew parallels between floods and the effects of climate change.

But the immediate focus on Thursday remained the rescue effort, with hundreds of firefighters, rescue workers and soldiers working to rescue people from the upper floors and roofs of their homes, filling sandbags to contain rising waters and looking for missing people.

One of the hardest hit regions was the German district of Ahrweiler, where flash floods flooded the village of Schuld, washed away six houses and left several more shortly before the collapse. At least 50 people died in the Ahrweiler district, the police said.

With so many missing, the district authority said late Thursday that the death toll is expected to rise. “In view of the complexity of the amount of damage, a final assessment of the situation is currently not possible,” it said in a press release.

“We do not have exact death numbers, but we can say that we have many people who fell victim to this flood,” said Armin Laschet, the governor of North Rhine-Westphalia, one of the most severely affected federal states in Germany.

“Many people lost everything they owned after the mud flowed into their homes,” said Laschet, who will replace Angela Merkel as Chancellor in the federal elections on September 26th.

The floods in North Rhine-Westphalia and Rhineland-Palatinate were among the worst in decades, after days of continuous rain sank more water than the soil and sewer system could absorb.

Police asked people to upload pictures of the floods to help them find it.

The police in North Rhine-Westphalia reported at least 30 deaths, with at least 15 people being known in the Euskirchen district south of Düsseldorf. Many others were still saved, although some villages remained inaccessible.

Ms. Merkel, who was visiting Washington on Thursday, expressed her condolences to the missing and thanked the thousands of helpers. She has promised the federal government to support the affected regions.

“Whatever is possible, we will do wherever we can,” she said, adding that Germany had received offers of help from its European partners.

Hundreds of firefighters worked all night to evacuate the stranded people. In Altena, North Rhine-Westphalia, two firefighters were killed while rescuing people, the police said.

“The water still flows knee-high through the streets, parked cars are thrown to the side, garbage and rubble pile up on the sides,” said Alexander Bange, the district spokesman for the Märkisches Land North Rhine-Westphalia news agency DPA

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“It’s really very depressing here,” he said.

Dozens of communities remained without electricity, while some villages were completely cut off, the police said. Telephone and cellular networks were also down, making it difficult for the authorities to track down the missing persons.

Belgium and the Netherlands also saw significant flooding when the weather system took hold in the region. According to the public broadcaster RTBF, at least two people were killed in the floods in the province of Liège in Belgium.

As the Meuse continued to reach dangerous proportions, the regional authorities asked the people of the city to evacuate and, if this was not possible, to take shelter on the upper floors of the buildings. All shops were closed and tourists were advised to leave.

The Belgian Defense Force said it was using helicopters and personnel to help with rescue and salvage work, while reports say the river is expected to rise several meters and endanger a dam.

In the Netherlands, according to the Dutch news agency NU.nl, soldiers were sent to the province of Limburg for evacuation, where at least one nursing home had to be evacuated.

Intense rain in Switzerland caused the country’s weather service to warn on Thursday that the floods would worsen in the coming days. On Lake Biel, Lake Thun and Lake Lucerne there is a high risk of flooding and the potential for landslides has been pointed out.

The chairman of Friends of the Earth Germany in North Rhine-Westphalia combined the severe flooding in the region with a failed policy of the state legislature. The effects of climate change are one of the issues that were hotly debated in Germany ahead of the September elections, in which the Greens are running for second place behind the conservative Christian Democrats led by Mr Laschet.

“The catastrophic consequences of the heavy rainfalls of the last few days are mostly homemade,” said Holger Sticht, who heads the regional chapter and made lawmakers and industry responsible for building in floodplains and forests. “We urgently need to change course.”

Megan Specia contributed to the coverage.

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Glacier Bursts in India, Leaving Extra Than 100 Lacking in Floods

NEW DELHI – A Himalayan glacier broke, causing sudden, massive flooding in the northern Indian state of Uttarakhand on Sunday, destroying two dam projects and forcing authorities to try to evacuate villages and save more than 100 lives.

Trivendra Singh Rawat, the prime minister of Uttarakhand, said seven bodies had been recovered and that about 125 people, including many workers on the two largely swept away hydropower projects, were not reported.

“An avalanche came and completely broke the Rishiganga power plant project and almost all of the workers there are missing,” said Ashok Kumar, the Uttarakhand police chief. “When the water came downriver, we alerted the people.”

The scenes were reminiscent of floods in Uttarakhand in 2013, when heavy rain for several days led to landslides in which thousands of people were killed and entire villages were washed away.

But the latest disaster has also aroused fears about what is to come. Scientists who said a glacier breaking in the middle of winter was a result of climate change have warned that rising temperatures are melting Himalayan glaciers at an alarming rate. The glaciers that provide water to tens of millions of people may have largely disappeared by the end of the century, according to a recent study.

The Chamoli district in Uttarakhand appeared to be hardest hit by the flowing Dhauliganga River. Amit Shah, India’s interior minister, said the country’s disaster relief teams had been flown in. Hundreds of soldiers and members of the Indian-Tibetan border police were also there, other officials said.

Videos on social media showed violent water fluctuations down the mountain canyons, washing away bridges, and what hydroelectric power stations looked like one of the dams.

Officials said 35 people were working on the Rishiganga power plant project, which was closer to the swept glacier, and 176 others were working on a second project about three miles downstream.

Ratan Singh Rana, 55, from Raini village near the Rishiganga Project, said the water flowed down the mountain around 10:30 a.m.

“I was sitting on the floor of my house,” he said. “I saw black liquid flowing from the Nanda Devi mountainside – with a lot of noise downwards – as if a volcano had erupted.”

“It was only 20-25 meters from us,” he added. “We ran uphill about 250 meters and kept crying and shouting, ‘Bhago, bhago! Bachao, bachao! “He said, using the Hindi words for” run “and” save us! ” “

Mr. Rana said the muddy water swept large boulders and ice downstream. His daughter and granddaughter were trapped in the house, and mud debris locked the main entrance. You managed to save her from the back of the house.

“We thought the whole world would drown in it,” he said. “I thought that today is the end, that we would leave this world today.”

Late on Sunday afternoon, the worst damage from the flooding appeared to be over.

Prime Minister Mr Rawat visited Chamoli and posted a video on Twitter indicating that water flow had slowed. He expressed hope that some of the missing could be saved. Local media reports say 16 people trapped in a tunnel have so far been rescued.

“Our particular focus is on rescuing the workers trapped in the tunnels,” he said.

The disaster led critics to point fingers at the government for building a dam near the glaciers at a time when the area is so vulnerable to climate change.

Uma Bharti, a former minister of water resources and river development in Prime Minister Narendra Modi’s government, said she had warned against placing a hydropower project on the river near the Himalayas.

“This incident, which occurred near Rishiganga in the Himalayas, is both worrying and cautionary,” Ms. Bharti said on Twitter. She said she warned that the Himalayas “is a very sensitive area and therefore these projects on the Ganges and its tributaries should not be built.”

Anil Joshi, an environmentalist who studies the Himalayan region, said the swept-away dam was built on India’s second highest mountain just a few kilometers from the Nanda Devi Glacier.

“At this point, a glacier avalanche is indicative of climate change,” Joshi said, referring to how the episode happened during the winter cold. “Changes in temperature caused glaciers to detach and damaged the dam in Rishiganga.”

Mr Joshi said he had difficulty understanding why the government built the dam so close to the glacier. “Now this water is flowing at cyclone speed.” he said.