Japanese steelmaker Nippon Steel’s executive vice president Katsuhiro Miyamoto has said that the company is ready for the downside risk the coronavirus outbreak may cause, according to a media report by Reuters. He stated that the coronavirus outbreak led to a decrease in manufacturing activities in China and so this situation may put downward pressure on demand in the automotive and machinery industries. The company has not cut its crude steel output yet. However, the company should be ready for the downside, according to Miyamoto.
He indicated that the main steel product inventories such as rebar and hot rolled coil have increased in China since coronavirus cases soared in late January and that the coronavirus may have a wider impact on the market situation if industrial activity remains at the same levels in China.
He also stated that they could not estimate the coronavirus impact, but foresaw that the April-September period of 2020 will be difficult for their company.
According to Miyamoto, steel mills’ inventories in China increased by 30 percent in early February compared to the previous year, while stocks held at Nippon Steel’s steel joint venture in Shanghai are also rising due to transport disruptions.
Nippon Steel had announced that it would cut its production capacity by almost ten percent in February.