Japan's tsunami and earthquake is causing economic fallout in the automotive, electronics and shipping industries.
Japan begins to tally up the cost
Many of Japan's largest companies are struggling to open for business after the earthquake and tsunami that will have far-reaching consequences for global trade.
The world's third-largest economy has been ground down to a virtual standstill after Friday's massive disaster, and economic aftershocks are expected for the world's motor , electronics, oil and gas, insurance, aviation, shipping and nuclear industries.
The car makers Toyota, Nissan and Honda have suspended operations at 10 factories while Sony, the electronics giant, has temporarily shuttered six factories, although only one sustained major damage.
The weight of the economic fallout is leading to dire predictions for the Japanese economy.
"The Nikkei can drop about 20 per cent from a recent high of around 10,900," said Masaru Hamasaki, a senior strategist at Toyota Asset Management.
Japan's giant export machine should eventually be able to resurrect itself, as few major industries are clustered in the country's north west where the damage occurred.
Nonetheless, a grim picture is unfolding. A fifth of the country's nuclear energy capability has been switched off and major oil refineries have been knocked out of action.
And the area of the country most directly affected by the quake has about US$300 billion (Dh1.1 trillion) of insured property, according to the disaster-modelling company Air Worldwide. Japan has shut down a total of 774,000 barrels per day (bpd) of refining capacity since the earthquake, the Eurasia Group said.
With many Japanese ports still closed after the powerful earthquake and tsunami in north-east Japan, it could take several days if not weeks before shipping activity in the region returns to normal, traders and shipbrokers said.
The damage to Japan's nuclear facilities could also force a re-examination of planned nuclear energy projects around the world, analysts said.
The natural disaster sent ripple effects towards Japan's consumer products sector. Canon, the world's largest maker of digital cameras, planned to halt operations at eight production and development facilities.
Suzuki also planned today to stop production and operations at all six of its Japanese plants for an undetermined amount of time because of delayed deliveries from parts makers in areas affected by the earthquake.
Japan is one of Dubai's largest trade partners, representing 5 per cent of direct imports and 6 per cent of free-zone imports into the emirate in 2009, according to data from the Dubai Export Development Corporation (DEDC).
Direct imports that year totalled Dh16.3bn, while imports through free zones were worth Dh8.5bn in 2009.
Dubai's main imports from Japan are machinery, electrical and electronics equipment, as well as photographic goods such as cameras, according to the DEDC.
Emergency shutdowns at earthquake-stricken nuclear plants will result in Japan importing more fuel for thermal power generation.
In the short term, Japan is likely to turn to fuel oil and coal to satisfy power demand. Longer term, suppliers of liquefied natural gas (LNG), including Qatar, will benefit.
The scale of the damage to nuclear power plants could trigger a rethink of Tokyo's plans to build significant new nuclear capacity, experts said.
"The alternative to nuclear is LNG," the consultancy Bernstein Research said in a report. "If the 10 gigawatt nuclear expansion is curtailed, it could benefit Australian LNG exporters."
International oil companies are developing big projects to export gas from Australia in the form of LNG, but those shipments mostly lie years in the future.
In the meantime, Qatar has excess LNG production capacity and could start shipping extra cargoes to Japan almost immediately. It could also divert existing LNG cargoes there from lower-paying markets.
But a big question is how much damage Japan's Pacific coast LNG terminals and gas pipelines sustained from the 8.9-magnitude earthquake and resulting tsunami that devastated the north-east coast of Honshu, the largest Japanese island.
If the damage was severe, then Japan would have to turn temporarily to dirtier fossil fuels - oil and coal - to sustain adequate power supplies.
It might also import fuel oil from South East Asian refineries and Indonesian or Australian coal.
* with agencies