CISA: Steel exports from China to decline sharply in Q1

Monday, 24 February 2020 16:13:39 (GMT+3)   |   Shanghai
       

Luo Tiejun, vice president of the China Iron and Steel Association (CISA), outlined in an online press release on February 22 the main impacts on the Chinese steel industry due to the coronavirus.

Export volumes will see a sharp decline in February and orders for March shipment will face uncertainty. However, the export situation will likely improve compared to the first quarter of the year, though it will still indicate a year-on-year drop. According to different expectations, exports could decline by 5-10 percent in the first quarter due to the partial closure of some ports and delays in loading.  

Secondly, demand from downstream users in the domestic market will slacken due to the postponement of production and consumption, mainly from the construction and machinery industries. Moreover, quickly increasing inventories will negatively affect the steel market.

Finished steel prices have decreased amid the cautious sentiments prevailing among market players, while iron ore prices have moved up as major miners reduced their expectations for iron ore output in the first quarter.

Chinese steel enterprises will reduce their output due to the coronavirus. A few major producers, including Baosteel, have already announced plans to cut production by five percent in the first quarter.  Transportation restrictions will result in short supply of raw materials and difficulties in delivering products. 


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