Market Segment
Virus to Weaken Chinese Steel Production by Just 2.7 Percent in Q1
Written by Tim Triplett
February 27, 2020
Despite the dramatic impact of the COVID-19 virus on the Chinese workforce and the nation’s commerce, the China Iron and Steel Association forecasts that steel production will decrease by only 2.7 percent in the first quarter. Crude steel production has actually increased by around 3 percent in February.
Analysts warn that China’s steel production is likely to outpace its steel consumption until the virus runs its course, creating a surplus that could end up on the export market, driving down global steel prices.
China’s electric arc furnace mills are currently operating below 20 percent capacity due to tight scrap supplies and low steel prices. If the EAF mills maintain such a low capacity utilization rate, their output will decline by 4-5 million tons in March.
Most of China’s steel is produced by blast furnaces, however, which continue to operate at more than 80 percent of their capacity despite tight supplies of raw materials and finished steel inventories that continue to accumulate.
In total, CISA estimates that China’s domestic crude steel output in March will decline by 5-6 million tons or 7 percent compared to the same period of last year. Cumulative crude steel output for the first quarter will total about 237 million tons, a decrease of 3.5-4.0 million tons, or 2.7 percent year over year.
Tim Triplett
Read more from Tim TriplettLatest in Market Segment
Ryerson, Olympic bet big on merger as steel slump enters third year
Executives framed the all-stock deal as a path to scale, efficiency, and long-term growth despite ongoing weakness in the metals market.
Olympic’s Q3 profits fall, announces merger with Ryerson
Olympic Steel reported a decline in third-quarter earnings on Tuesday, as the company separately announced its merger with service center giant Ryerson.
M&A blockbuster as Ryerson, Olympic Steel announce merger
National service center chains Ryerson Holding Corp. and Olympic Steel Corp. have announced a merger between the two companies.
Ryerson reports net loss in Q3 as weak demand offsets tariff price support
President and CEO Eddie Lehner said Ryerson has faced market headwinds in the third quarter.
Nucor navigates mixed flat-rolled markets with strategic muscle
Nucor entered the fourth quarter with clear forward momentum: stronger-than-expected results, solid sheet and plate demand, and construction progress on a major new mill that should add capacity next year.