Photo taken on Jan. 21 shows a general view of fog-shrouded Shanghai. [CFP]

With the visibility limited in 200 meters in many areas of the city, the observatory issued a yellow fog alert, lowest of the three-scale system, at 1:45am.

Visibility at the mouth of Yangtze River started declining on Sunday night, dropping to less than 100 meters at the Yangshan Deep-Water Port northeast of downtown.

The operation at the port was halted and the movement of ships was restricted, said city maritime officials.

Officials said it was the second time within a week since January 15 that fog severely affected traffic on the water.

The ferries to local Shanghai's three islands were halted for hours yesterday as riders took buses instead. The water traffic gradually resumed yesterday afternoon as the sky cleared.

However, ferry services to the islands in neighboring Zhejiang Province will be canceled today, said city traffic officials.

More than 500 air passengers saw four international flights redirected to neighboring airports early yesterday because of fog at Pudong International Airport. No large groups of passengers were stranded at the airport, said authorities.

The yellow alert was lifted at 8:55am when the fog started to ease.