Chinese mills cut steel output on Coronavirus impact
Biznextindia : Despite registering a growth of 7.2 % in January, the outbreak of Novel Coronavirus (COVIT 19) has heavily impacted steel production in China, the world’s top steelmaker. The drop in Chinese steel production is likely to impact the global steel output in the current quarter.
According to a report by Shanghai Metal Market (SMM), the output cut at integrated steel mills has continued in mainland China. Out of the 102 integrated steel mills SMM has surveyed, 52.94% plants are operating normally and 47% have either reduced output or conducting maintenance.
“End-user demand that has yet to recover completely, inventory pressure and environmental restrictions prompted more mills to undertake maintenance this week. Maintenance had an impact on construction steel, while flat products were barely affected. 91.7% of steel mills under maintenance overhauled rolling lines of construction steel, and only 8.3% overhauled rolling lines of flat products” SMM said.
“Meanwhile, maintenance at steel mills has resulted in a loss of 192,000 mt of pig iron output per day on average as of February 24. This affected the 330,000 mt of daily demand for iron ore. North China accounted for 72% of the demand loss, which was mainly driven by Hebei province where strict environmental restrictions prompted steel mills to undertake maintenance” it added.
As per the latest ‘Worldsteel’ data, the global crude steel output grew by 2.1% in January backed by the output growth in China. However, the other major steel-producing countries like India, Japan and South Kore have reported negative growth in steel production in January.
