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Traders Seek China’s Masks to Help U.S. Hospitals Battle the Coronavirus

protect front-line medical workers battling the coronavirus epidemic has spurred a mad international scramble for masks and other protective gear. Governments, hospital chains, clinics and entrepreneurs are scouring the world for personal protection equipment they can buy or sell — and a new type of trader has sprung up to make that happen.

The market has become a series of hasty deals in bars, sudden calls to corporate jet pilots and fast-moving wire transfers among bank accounts in Hong Kong, the United States, Europe and the Caribbean.

The stakes are high, and so are the prices. Wholesale costs for N95 respirators, a crucial type of mask for protecting medical workers, have quintupled. Trans-Pacific airfreight charges have tripled.

“It’s a global free-for-all, trying to get capacity,” said Eric Jantzen, the vice president for North America at Vertis Aviation, an aircraft and air cargo brokerage based in Zurich. “And the prices reflect that.”

The hurdles keep rising. On Tuesday, after complaints from Europe about shoddy Chinese masks and ineffective test kits, China’s Ministry of Commerce ordered manufacturers to provide further assurances that their products met standards.

World leaders are moving to get supplies, but they are still grappling with the vast scope of the problem. The White House announced over the weekend that it had organized 22 flights to airlift personal protection equipment. They are aimed at resupplying hospitals that are within 72 hours of running out of protection equipment, said Gregory Forrester, the chief executive of National Voluntary Organizations Active in Disaster, a group that works with American federal and state officials.

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Credit…Thomas Paudeleux/EPA, via Shutterstock

“If any one of these planes don’t take off,” Mr. Forrester said, “that’s going to be an issue.”

China vacuumed up a big share of global supplies after the outbreak emerged in January. It imported two billion masks in a five-week period starting then, according to Chinese customs data, roughly equivalent to two and a half months of global production. It also imported 400 million pieces of other protective gear, from medical goggles to biohazard coveralls.

Now, China has become a major part of the solution. Already a giant in mask manufacturing, it has ramped up production to nearly 12 times its earlier level of 10 million a day. It was a huge mobilization effort that involved redesigning freight train routes and sending large numbers of workers across the country in sealed buses.

The Chinese government has encouraged global deals, but buying and selling masks is no easy feat. Traders, some just weeks into their unstable careers, have to navigate confusion, fraud attempts, byzantine customs laws and other barriers.

Many say they sell directly to hospitals and others who need the equipment, not to speculators. Altruism aside, hospitals are also less likely to default on payments and more likely to know precisely what is in demand.

“It becomes so much easier when you deal with the procurement professionals, because they know exactly what they need,” said Blake Noah, a private banking art consultant who now arranges mask shipments in Shanghai.

Some factories make products of suspect quality, and some sellers will even try to swindle buyers. Last Thursday, a court in the Chinese city of Shaoxing sentenced a man to over 10 years in prison for repeatedly selling what looked like a cargo of masks but had only tree branches inside.

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Mask traders in Shanghai say they have wasted time bargaining over rumored caches of masks before concluding that the only reliable suppliers are top managers at the factories themselves.

“I’m still being put in touch with people who claim to have caches of 3M-branded masks,” Mr. Noah said. “But I’m skeptical such caches exist after looking at four or five phantom caches.”

Some Chinese factories remain reluctant to sell to foreign buyers. National government agencies and local officials often give conflicting advice and say the factories should meet local needs first.

“When we try to place larger orders, some are saying there’s a limit or there are restrictions,” said Noah Silverman, a Chicago banker who has jumped into trying to help hospitals in the United States.

Some Chinese companies say they are ready to sell masks globally. Henan Doria Mechanical Equipment, a company in Zhengzhou that once made overhead cranes and electric hoists, has reinvented itself as a maker of N95 respirators and tells traders that it can meet orders for up to two million masks within 15 days.

Once masks are found, they have to be transported. China’s cancellation of almost all of its international passenger flights to slow the spread of the virus has made it hard to move goods quickly. Half the world’s air cargo used to move in the bellies of passenger planes.

Jason Yuan, a manager at a state-owned trading company in Beijing, said his company had sent out small samples of N95 respirators to Europe, Cambodia, the Philippines and the United States.

“In other countries, the packages have arrived,” he said, “but in the case of the U.S., the package is still in Hong Kong.”

Zhang Qing, a senior Chinese aviation regulator, said the Chinese government was making it easier for air freighters to move in and out of the country. Airlines are even operating passenger aircraft as freighters, she said.

But China wants the United States to provide the planes for any large-scale shipments of personal protection equipment. Ren Hong, an infrastructure development inspector at the National Development and Reform Commission, said China had only 173 air freighters while the United States had more than 550.

“The development of all-cargo aircraft in China is only in the initial stage,” she said.

Regulations can cause confusion. For example, importers are still parsing shifting United States regulations regarding respirators designed for use within China.

Fredrik Barner, a Shanghai freight agent, said he refused to arrange shipping last week for a cargo of respirators because the American buyer did not have a Food and Drug Administration license for importing medical supplies. He reversed course this week after learning that the cargo involved an industrial grade of respirator that the F.D.A. is now allowing to be imported in most cases without a license.

Transportation of respirators or masks, Mr. Barner said, is “more complicated than auto parts.”

Even though many hospitals in the United States are desperate for masks, selling to them isn’t always easy.

Deals have stalled because hospitals, accustomed to paying for supplies after they reach their loading docks, have balked at the stiff terms now being demanded by factories, mask traders said. They also fear fraud.

Producers of N95 respirators and surgical masks now insist that orders come with a 50 percent down payment, with the rest of the money due before the masks ever leave the factory gate, said Michael Crotty, the founder and president of Golden Pacific Fashion & Design in Shanghai. The company has switched from manufacturing curtains to placing orders for respirators and masks with its Chinese fabric suppliers.

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Factories sometime fill orders out of sequence, moving the highest-paying customers to the front of the line, he added.

“It’s a seller’s market,” Mr. Crotty said. “You don’t see this very often.”

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Credit…Zachary C. Bako for The New York Times

The fractious nature of the American medical system, which lacks a centralized purchasing authority, adds to the problems. In the United States, President Trump told state governors on March 16 that they should find respirators and ventilators themselves.

Mr. Crotty said he had been working on a request from the State of New York but had struggled to figure out the paperwork.

“It’s nuts because we’ve had to fill out the form two different times,” he said, “and they call and say we need to fill out the form again.”

Mr. Crotty is a 70-year-old chief executive who grew up in a family-owned curtain business in Ohio and never left the industry. When a supply crisis erupted for N95 respirators, he knew whom to call: His company’s nearby curtain factory previously used almost the same kind of fabric found in N95 respirators to make the bottom liners of pet beds.

“Several factories with which Golden Pacific had been working switched to making masks,” he said, “and they asked us to help market them.”

In the former French Concession neighborhood of Shanghai, some of the traders who handle masks gather several nights a week at a Western bar that specializes in grilled-cheese sandwiches.

One regular is Mr. Noah, a 37-year-old Iowan who used to shuttle among Shanghai, Singapore, London and Hong Kong to advise the super wealthy and their private bankers on art investments. He started learning everything he could about masks after hearing false rumors that private banking clients had stockpiles of them, then realized he could make a business out of representing foreign buyers in transactions with Chinese factories.

After eating his sandwich, he goes home and stays up until 5 every morning, working the phones. “I haven’t been sleeping more than a little for days,” he said.

Coral Yang contributed research.

  • Updated March 24, 2020

    • How does coronavirus spread?

      It seems to spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can be carried on tiny respiratory droplets that fall as they are coughed or sneezed out. It may also be transmitted when we touch a contaminated surface and then touch our face.

    • Is there a vaccine yet?

      No. The first testing in humans of an experimental vaccine began in mid-March. Such rapid development of a potential vaccine is unprecedented, but even if it is proved safe and effective, it probably will not be available for 12 to18 months.

    • What makes this outbreak so different?

      Unlike the flu, there is no known treatment or vaccine, and little is known about this particular virus so far. It seems to be more lethal than the flu, but the numbers are still uncertain. And it hits the elderly and those with underlying conditions — not just those with respiratory diseases — particularly hard.

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

    • How do I get tested?

      If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.

    • What if somebody in my family gets sick?

      If the family member doesn’t need hospitalization and can be cared for at home, you should help him or her with basic needs and monitor the symptoms, while also keeping as much distance as possible, according to guidelines issued by the C.D.C. If there’s space, the sick family member should stay in a separate room and use a separate bathroom. If masks are available, both the sick person and the caregiver should wear them when the caregiver enters the room. Make sure not to share any dishes or other household items and to regularly clean surfaces like counters, doorknobs, toilets and tables. Don’t forget to wash your hands frequently.

    • Should I wear a mask?

      Experts are divided on how much protection a regular surgical mask, or even a scarf, can provide for people who aren’t yet sick. The W.H.O. and C.D.C. say that unless you’re already sick, or caring for someone who is, wearing a face mask isn’t necessary. And stockpiling high-grade N95 masks will make it harder for nurses and other workers to access the resources they need. But researchers are also finding that there are more cases of asymptomatic transmission than were known early on in the pandemic. And a few experts say that masks could offer some protection in crowded places where it is not possible to stay 6 feet away from other people. Masks don’t replace hand-washing and social distancing.

    • Should I stock up on groceries?

      Plan two weeks of meals if possible. But people should not hoard food or supplies. Despite the empty shelves, the supply chain remains strong. And remember to wipe the handle of the grocery cart with a disinfecting wipe and wash your hands as soon as you get home.

    • Can I go to the park?

      Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea.

    • Should I pull my money from the markets?

      That’s not a good idea. Even if you’re retired, having a balanced portfolio of stocks and bonds so that your money keeps up with inflation, or even grows, makes sense. But retirees may want to think about having enough cash set aside for a year’s worth of living expenses and big payments needed over the next five years.

    • What should I do with my 401(k)?

      Watching your balance go up and down can be scary. You may be wondering if you should decrease your contributions — don’t! If your employer matches any part of your contributions, make sure you’re at least saving as much as you can to get that “free money.”

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