A major steel producer in the Philippines, SteelAsia Manufacturing, and a number of smaller bar producers have terminated production as of today, March 17, following the quarantine imposed in the whole of Luzon Island on Monday due to the rapid spread of the Covid-19 virus.
President Rodrigo Duterte has placed Luzon on an “enhanced community quarantine” from March 16 until April 12, which means strict home quarantine for all workers, suspension of production activities on the island and halt of travels. On Tuesday, the total number of infections in the Philippines increased by 45 new cases to 187.
As company’s sources informed SteelOrbis, one steel plant of SteelAsia located in Luzon - Bulacan Works - has suspended operations, with the capacity of 500,000 mt of rebar per year. As a source explained, all workers are staying at home. “The other steelworks with a combined capacity of 1.8 million metric tons in Cebu, Davao, Batangas and Villanueva Misamis Oriental are still operating. The situation is very fluid here with the government's resolve to contain Covid-19, but we have sufficient inventory to respond to market demand,” Roberto Cola, vice president of SteelAsia Manufacturing, said in a note to SteelOrbis.
“It is not easy to have full stoppage as there are orders to fulfil,” a Philippines-based trader said. Several rebar manufacturers in Luzon, including Pag-Asa Steel Works, have also been halted. “We stopped operations to comply with the government directive for a total lockdown. But we continue to receive material coming from the ports,” a representative of Pag-Asa Steel told SteelOrbis. As of March 17, ports in the Philippines have not been officially closed, according to a number of sources.
As a result, market sources said that the billet trading for April-May deliveries in Southeast Asia, where the Philippines is the largest importer, has been close to zero. “The billet market has already stopped,” a Singapore-based trader said. Some sources assess the current import billet market price in Southeast Asia at $410/mt CFR and even down to $400-405/mt CFR, while last week there were offers and deals at $410-415/mt CFR.