Hong Kong firms face profit squeeze as US importers cut orders amid oil crisis

2026.03.22 10:20 Kwai Chung Container Terminal. Photo: Elson Li Some United States importers have cut orders and shifted to short-term contracts after the Middle East conflict triggered a global oil crisis, according to Hong Kong business leaders, who warned of eroding profit margins and strained liquidity. Jeffrey Lam Kin-fung, an Executive Council member and businessman, said on Sunday that the US-Israel war on Iran had driven up fuel costs, which in turn raised operating expenses for local enterprises. He urged the Hong Kong government to bolster ties with Central Asia and Asean nations, framing the move as a vital strategy to diversify market risks. “Orders are greatly affected, shifting from long-term to short-term, but costs have risen with no room to pass them on through price increases,” Lam said. “The situation is unclear and will definitely impact the cash flow of Hong Kong small and medium-sized enterprises, so we cannot sit idly by.” Jeffrey Lam has urged the government to proactively forge connections with alternative markets, particularly Central Asia and the 10-member economic bloc Asean. Photo: Nora Tam The Middle East conflict has entered its fourth week, with Iran sealing off the Strait of Hormuz and triggering a global oil crisis. Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, told the South China Morning Post that geopolitics had caused a spillover effect on global energy prices and even a shift in pricing on international contracts. He cited the example of his family business Kam Pin Industrial, which produces architectural aluminium walls for the US and Japanese markets at its Dongguan production base. “While existing contracts remain at fixed rates, new business is becoming more expensive due to the volatility in energy markets. We have seen fewer orders from the US,” Lau said. As aluminium curtain wall projects were tied to lengthy construction cycles, orders typically consist of medium-to-lar

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