The Impacts of Coronavirus Outbreak on Chinese Steelmakers

The stocks surged higher by almost 160% when matched with end-December 2019 levels.

SEATTLE (Scrap Monster): The steel stocks held by Chinese steelmakers and distributors exceeded 55 million tonnes (Mt) as of end-March this year. This is the highest level in history. The stocks surged higher by almost 160% when matched with end-December 2019 levels.

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According to Frank Zhong, Chief Representative-Beijing Office, World Steel Association, the coronavirus pandemic has had huge impacts on all steel-consuming sectors, especially the construction sector in China. Nearly all construction projects in the country were stalled from end-January itself. The latest government data suggests huge contraction in steel use in Q1 this year. Although majority of construction and industrial sectors have returned to normal operations, the capacity utilization in some steel-using sectors is yet to regain pre-pandemic levels.

The easing of logistics bottleneck by early-March this year has boosted raw material supply and delivery of finished steel products. The crude steel production in the country is estimated to have increased by 1.2% over the previous year, mainly due to adequate raw material stocks with steel mills. The steel making operations remained largely unaffected as very few infections were reported in primary steel-producing regions.

The country’s steel industry is likely to benefit from the stimulus package announced by the Chinese government, said Zhong

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