Chinese Coronavirus Woes Could Mean Long, Hot Summer for Some Israelis

Medical staff prepare beds at a temporary hospital which transformed from an exhibition center for accepting patients who diagnosed with the coronavirus in Wuhan in central China’s Hubei province. (Chinatopix via AP)

Israelis who were planning to buy a new air conditioner for the upcoming summer season might want to make their purchases earlier. Israeli air conditioner manufacturers Electra and Tornado reported this week that there have been “significant disruptions” in their supply chains, and as a result, they would have no choice but to raise prices in the coming days. Tadiran, another air conditioner maker, said it was not raising prices just yet, but that customers could expect “significant delays” on their orders.

The problem is the lack of supply from factories in China – most of which are closed down due to the coronavirus outbreak. Even factories that have limited operations are having trouble shipping goods, as nearly all Chinese ports are closed now. Electra said that its suppliers were shut down, and are likely to remain so at least through next week. In addition to the difficulties in getting components shipped out of China, deliveries of raw materials – both from abroad and within China – have also trickled to a near-halt, so even if production were to ramp up to full levels immediately, there would still be significant supply delays until regular deliveries of raw materials ramp up to full level.

Medea, a Chinese company that supplies Electra, went back to work Monday, but that factory is also suffering from a lack of materials, the company said. Tadiran’s supplier. GREE, is still shut down. Calcalist quoted industry officials as saying that there was sufficient stock in Israel to supply the market for the next two months or so, but beyond that consumers could expect delays in both new systems – as well as parts for repair.

Last week, Israeli clothing chain Castro said that it would likely not be able to introduce its spring line of casual wear on time, because shipments out of China are very limited. Other Israeli clothiers have not discussed their supply issues, but industry experts told Yediot Acharonot that the impact of the coronavirus closures on the clothing industry should be less than on “white goods” such as air conditioners, refrigerators or washing machines, as significant amounts of clothing are manufactured in places like Vietnam, Cambodia and Bangladesh. However, if the virus continues to spread and causes widespread closures in those areas, clothing could increase in price as well.

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