{"id":1321,"date":"2020-01-13T17:23:03","date_gmt":"2020-01-13T09:23:03","guid":{"rendered":"http:\/\/dpfireworks.com\/blog\/?p=1321"},"modified":"2020-01-16T11:59:11","modified_gmt":"2020-01-16T03:59:11","slug":"fireworks-industry-facing-multiple-uncertaintiesbetter-be-prepared","status":"publish","type":"post","link":"https:\/\/dpfireworks.com\/blog\/2020\/01\/13\/fireworks-industry-facing-multiple-uncertaintiesbetter-be-prepared\/","title":{"rendered":"Fireworks industry facing multiple uncertainties,better be prepared"},"content":{"rendered":"

For the industry, the recovery after the explosion on Dec. 4th has not been as fast!\u00a0\u00a0 \u00a0In talking with other major exporters at a recent meeting in Liuyang, all confirmed that these critical months of Dec and Jan have been largely lost with both production and shipping being greatly reduced vs previous years.\u00a0 While December & January typically does not feel like fireworks season for those of you selling on July 4th<\/sup>.\u00a0\u00a0 It is actually a critical time for production in China.<\/p>\n

This good news is that this accident happened early and we have some time to try to recover.\u00a0\u00a0 The bad news is that even though we have time, the situation is very difficult.\u00a0\u00a0\u00a0 As an example, the factories are all winding down this week for the long Chinese New\u00a0 Year shutdown.\u00a0\u00a0 The holiday should be over mid-February, however, the reality is that it is cold and wet in mid-February.\u00a0\u00a0 Most factory workers are older women and only use the income as a supplement, so by choice, many will not return to work until the weather begins to warm again in April.\u00a0\u00a0\u00a0 In addition, there is the annual Beijing government meeting held in mid-March which likely will formally close the factories again.\u00a0\u00a0 \u00a0\u00a0\u00a0In addition, Feb & March are very wet and cold in Hunan, so this poses a challenge for production with sub-par performance and\u00a0 mold issues possible.\u00a0\u00a0\u00a0 And these are just the normal issues in Feb & March!<\/p>\n

 <\/p>\n

This year, we face the additional uncertainly of the government final reaction to the Dec. 4th<\/sup> explosion.\u00a0\u00a0\u00a0 An \u201cinvestigation team\u201d of technocrats have set-up temporary offices in the local hotel and it appears that their goal is to show the big bosses in Beijing that \u201cheads are rolling\u201d and \u201cthis\u00a0 time will be different\u201d.\u00a0\u00a0 As an example, the Ministry\u00a0of\u00a0Emergency\u00a0Management in Beijing has set a target for the industry to close another 300 factories and require the new factories be held to a higher level factory standard.\u00a0\u00a0\u00a0 So what are these \u201cstandards\u201d exactly?\u00a0\u00a0\u00a0 China\u2019s fireworks laws (GB Standard 2013), much like the USA\u2019s laws, were written many years ago and have countless contradictions and disconnects with the reality of the fireworks industry.\u00a0\u00a0 \u00a0As the investigation team started to review the China laws in detail they have run across several contradictions between USA law and China law.\u00a0\u00a0 In the past, the argument was that if an item was legal in the USA, the USA law should be used if the item was transported directly out of China.\u00a0\u00a0\u00a0 However, the Dec 4th<\/sup> accident\u00a0 was caused by a very large firecracker which supposedly was \u201clegal\u201d in the country it was being exported to.\u00a0\u00a0 \u00a0So now this explosion is being used by the \u201cinvestigation team\u201d to argue that foreign laws might allow dangerous products to be manufactured and therefore foreign laws should be ignored and only China law followed.<\/p>\n

 <\/p>\n

As an example, 1.3g salutes larger than 2 inches have now been banned.\u00a0\u00a0 8 Inch shells, even with the improved packing have been banned.\u00a0\u00a0\u00a0 And most recently, USA products like the consumer 3 inch nine shot cakes have reclassified as 1.3g!<\/p>\n

 <\/p>\n

All of these examples are \u201cin-progress\u201d interpretations by the investigation team.\u00a0\u00a0 They have not made any final rulings yet and we don\u2019t expect anything until after Chinese New Year.\u00a0\u00a0\u00a0 The issue is that if they enforce the China Law as it stands then \u00a0there will be many conflicts with traditional USA items (3 inch consumer cakes, 1.3g Salutes, 8 inch shells, etc.).\u00a0\u00a0\u00a0 If they attempt to re-write the China law to remove some of the inconsistencies, then the risk is that the final ruling might take months.\u00a0 \u00a0The fear is that if this drags on for months, then many of the smaller factories will simply not be able to reopen.\u00a0\u00a0 The process is that factories can apply to the investigation team for approval to reopen at any time.\u00a0 However, many factories realize that they can\u2019t meet the standard and are choosing to not apply for fear that they might be permanently closed if they are scrutinized.\u00a0\u00a0\u00a0 Even if approved, the rumor is that all factories will have to reduce workers and powder weight by 40% in order to minimize risk.\u00a0\u00a0 So basically this means some factories might choose not to open at all for 2020 and those that do will only be able to produce at about half of normal output.\u00a0 If this happens, then demand will outstrip supply and obviously this will put price pressure on the industry.<\/p>\n

 <\/p>\n

To add salt to the wound, Huayang, the biggest fireworks logistics company, stopped shipments via Shanghai on Jan 1st<\/sup>, due to China transportation officials claiming that their shipping paperwork (which they have used for 15 years) was not adequate.\u00a0\u00a0 \u00a0\u00a0\u00a0Huayang is trying to update their process and comply, but there are some serious cost implications, and a solution is still being worked on.\u00a0\u00a0 We hope this will be resolved before the factories re-open in Feb\/March, but it remains a big risk factor as well.<\/p>\n

 <\/p>\n

The bottom line is that this season, unlike any others in the past, face multiple uncertainties.\u00a0\u00a0\u00a0 \u00a0We also had a shipping crisis last season where Shanghai was closed.\u00a0\u00a0 But that happened in April and the majority of our products were shipped already.\u00a0\u00a0 Also, that crisis did not affect production.\u00a0\u00a0 This season, the crisis happened early so it has a much larger potential impact.\u00a0\u00a0 Also this season the crisis is effecting both production and shipping.\u00a0\u00a0\u00a0\u00a0 The hope is that after the long Chinese New Year holiday, Beijing will have moved onto to other issues and the fireworks industry can continue on largely as before.\u00a0\u00a0\u00a0 However, there is also the risk that \u201cthis time will be different\u201d and the investigation will drag on for months.\u00a0\u00a0 If this happens then the USA July 4th<\/sup> season will be in jeopardy.<\/p>\n

 <\/p>\n

As always, our suggestion is getting product out of China sooner, rather than later, is the wise choice.\u00a0\u00a0 While it seems like every year the industry keeps pulling off miracles and everything gets shipped, this year could be the exception.\u00a0\u00a0 So, please contact us for a detailed update of your production status and review the attached stock list for possible replacements to get your order shipping sooner, rather than later.<\/p>\n

 <\/p>\n

All the best.<\/p>\n","protected":false},"excerpt":{"rendered":"

For the industry, the recovery after the explosion on Dec. 4th has not been as fast!\u00a0\u00a0 \u00a0In talking with other major exporters at a recent meeting in Liuyang, all confirmed that these critical months of Dec and Jan have been … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[62],"tags":[111,134,132,133,10],"class_list":["post-1321","post","type-post","status-publish","format-standard","hentry","category-fireworks","tag-dunpai-fireworks","tag-fireworks-accident","tag-fireworks-factories","tag-fireworks-factories-in-china","tag-fireworks-industry"],"_links":{"self":[{"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/posts\/1321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/comments?post=1321"}],"version-history":[{"count":4,"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/posts\/1321\/revisions"}],"predecessor-version":[{"id":1325,"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/posts\/1321\/revisions\/1325"}],"wp:attachment":[{"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/media?parent=1321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/categories?post=1321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dpfireworks.com\/blog\/wp-json\/wp\/v2\/tags?post=1321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}