Hunan Province-based Chinese steelmaker Hunan Valin Iron & Steel Co. (Hunan Valin Steel) has stated that its crude steel output in January this year almost remained stable compared to its output in the same period last year, while its raw materials could basically meet its needs for production.
However, due to the ongoing coronavirus outbreak, some downstream users have not resumed their production yet, which will exert a negative impact on the company’s performance. Meanwhile, Valin Steel said it expects that demand for import iron ore will shrink in the short term, which will drag down iron ore prices. Accordingly, import iron ore prices in 2020 will decline compared to 2019.
Since the coronavirus will likely affect production resumption and logistics, Valin Steel foresees that its steel supply will decrease in February and March, which will ease the downward pressure on finished steel prices.
Valin Steel plans to produce 24-25 million mt of crude steel in 2020, while it will implement a low-inventory operation strategy to cut costs. In 2019, its crude steel production was 24.31 million mt, as SteelOrbis reported earlier.