The China Iron and Steel Association (CISA) has stated that the outbreak of the coronavirus will negatively affect the operating performance of the steel industry, with the impact to be concentrated in the first quarter of the year. In particular, the negative impacts from the coronavirus on downstream industries will be bigger than on the steel production side, while they will result in declines in raw material and finished steel prices.
However, in the medium term, with the outbreak of the coronavirus ending or slowing down, the steel industry will perform better as China has been issuing measures to stabilize economic growth. As a result, the CISA has forecast that the operating performance of the steel industry in the second quarter will be better, though it also urged market players not to increase capacity utilization rates and not to push up inventory levels in the steel industry.
The confirmed cases of the coronavirus have already exceeded 28,000 and the death toll has risen to 563. More than 20 provinces in China have extended the holiday period until February 9 and the government has imposed restrictions on transportation, trying to prevent further rapid spread of the virus. Most construction activities in China will not resume in the coming week, according to sources.