Upon trying to explain to my five year-old daughter this weekend what coronavirus is, I was pleasantly surprised by her immediate response. “Yes, it’s like the Great Plague of 1665, Daddy.”
I was surprised firstly by her ability to recite the details of the Great Plague, from its year of occurrence to then proceeding to tell me further details about the event and the quarantine measures put in place.
Secondly, though, I was surprised to learn that she already had a working knowledge of today’s coronavirus. Clearly, it is being discussed at even a very basic level in schools. Such awareness across the generations, in likelihood across the world, can only be a good thing. Yet there are so many questions still to be answered. Are we still at the start of this particular virus’ cycle? How long will it last? What is the true footprint of its outbreak?
Naturally I tried to answer my daughter’s curiosities as best I could, but the fact is that none of us know the answer to these ongoing questions. We don’t know how more virulent Covid-19 could prove to be. We don’t when it’s spread will peak, or necessarily what the signs of that peak would be.
We’ve been given encouraging signs to this effect from China this week. Several successive days of lowest ever outbreak figures day-on-day, people gradually going back to work, and the announcement that the country is past its peak period of Covid-19.
For other parts of Asia, however, and much of the rest of the world, the journey of navigating the path through transmission, containment, delay and peak is only just beginning. Countries continue to record their first confirmed cases; travel restrictions continue to be enforced; gatherings of more than 100 people continue to be banned or at least advised against in many countries. The ripple effect of this particular stone being thrown into a global lake continues to be felt.
Clearly, there are still a great many questions to be answered with Covid-19, much to be learned about the virus, and arguably more to be learned about its containment or prevention. There are understandably questions too for our industry.
Are or will events in the region be affected?
We’ve already seen many of the answers to this question. The industrial gases business has a notoriously intense agenda of events and meetings throughout the year, in locations all across the world – and we have already seen many if not most of these affected.
When I first started penning my thoughts here, several days ago now, it was still very much a case of business as usual in many instances. As I continue to write, even that situation has changed – the clear air of caution and responsibility now necessitates reduced or altogether restricted travel plans for a large proportion of the industry. More events have succumbed to postponements in this time, including one of our own at gasworld.
We were thoroughly frustrated and disappointed to have to postpone our Hydrogen Summit 2020 in Munich to new dates in July, but we’re also keenly aware of our responsibilities as an event’s organiser and aware too of the strain that continuing with such events puts on those within the industry. There are already enough difficult decisions that are having to be made.
We continue to take the situation very seriously and are monitoring it on a daily basis with a view to our remaining events calendar.
Are once routine business trips now being questioned or cancelled?
As I understand it, yes they are. I’ve heard from many of the hardened travellers in our industry, those used to traversing the globe for many weeks at a time throughout the year, and what I’m hearing is that they are grounded – whether due to company-wide restrictions, country-wide restrictions, or personal concerns and convictions.
It’s clear that we are having to re-think our approach to business during such times, and I can’t help thinking that this is a firm reminder of the benefits and advances in digitisation. Perhaps we are realising that Industry 4.0 isn’t just about mechanising plants and automating processes, it’s about how we connect and converse with each other – it’s about a reimagining of our current globalisation.
I alluded to this very point during a talk I gave 18 months ago in Kuala Lumpur, Malaysia: how we shouldn’t see the digitisation of the gases industry as a threat or trend to be feared – but instead as simply reimagining the same traditional pillars that it has been built upon for decades.
Digital technologies – from e-commerce to webinars and conference calls – allow us to connect with and do business with each other in new ways. In the current absence of travel and face-to-face fostering of relationships, for the time being we can view this as learning in bandwidth bridging borders; video over voyages; and webinar over whistle-stop event participation. I’ll be writing more about this topic in the coming days.
What is the economic or business impact on the industry? Will the gases business be affected by the ripple effect of the virus?
We have already heard that helium markets may be impacted in two ways. As helium is produced as a by-product of LNG production at five plants located in Qatar, Algeria and Australia, any curtailment of production at the LNG plants that also produce helium would also reduce helium production.
Of the LNG plants that produce helium, the plants in Ras Laffan in Qatar are by far the most significant to helium supply, with approximately 30% of the world’s helium produced in Qatar. Qatar is known to be one of China’s long-term suppliers of LNG.
The more significant impact of Covid-19 is likely to be a temporary reduction in China’s demand for helium. The Chinese market is believed to represent at least 12% of global demand for helium and a significant curtailment of industrial activity due to coronavirus could reduce global demand for helium by as much as 2-3%, eminent helium analyst Phil Kornbluth explained.
While this would not be enough to end the global helium shortage, softer demand in China would bring modest, temporary relief to helium markets, at a time when they continue to struggle to cope with Helium Shortage 3.0.
We are yet to hear of any other direct impacts so far, but questions remain. Will the impact extend beyond helium markets as shown here? Will the inevitable economic impact, first and foremost on China but also in other countries, affect our industry?
From challenge to opportunity
Ultimately, for us all, this is still very much a step into the unknown. Who knows what ripple effects could yet play out, how staggered the business impact is, or in turn what drive in demand there could be for our industry and its fundamental products.
For now, we have to get used to a new normal in business as usual, and maintain a sense of due caution and sensibility as we do so. There are many questions, and there is arguably a renewed time for contemplation – but there cannot be room for panic. As I said to my daughter, this isn’t 1665 and we’re not about to start adorning quarantined front door’s with a big red ‘X’ just yet!
This is a time for resolve, for our industry, for the clean energies movement that has gathered such momentum, and for us all as individuals. There is and will be great medical, economic and societal impact from coronavirus. But, certainly from a business perspective, we can also choose to see opportunities in the face of crisis, where possible. As the suite of digital technologies today shows, 2020 can be a time of new learnings and new ways of doing business.
We must remember that not only is our industry very good at turning challenges into opportunities, it’s also incredibly robust even during the hardest of economic times, and so we must remain in the face of Covid-19 this 2020.