In the new year of 2020, a sudden plague of new coronavirus pneumonia caused China to “win “the attention of the world. The Chinese people, under the leadership of the CPC Central Committee, participated in this smoke-free smoke war. There is Chinese words: If one party is in trouble, all parties will support it, Countless “retrogrades”, and many more unknown heroes are devoting their own efforts to this battle. All the Chinese people’s wills unite like a fortress and overcome the difficulties together.

Thanks to the efforts of the people, the data of patients diagnosed with new coronary pneumonia and the number of suspected cases in various regions have continued to decline, which is encouraged everyone to continue to persevere. We have seen the dawn and will soon be victorious. The government has encouraged enterprises and manufacturers to resume work one after another and resume production, which the situation has obviously improved area.

For the iron and steel foreign trade export industry, affected by the epidemic, many provinces and cities across the country announced that they will postpone the resumption of work, and the major steel industries such as construction, machinery, shipbuilding and other industries have postponed their construction，which lead to the demand for downstream steel in the first quarter will decline significantly. Since raw material suppliers have not stopped production during the Spring Festival holiday, raw material manufacturers are currently facing a lot of inventory pressure. Therefore, in order to consume inventory, they are currently selling inventory at a discount. Therefore, the current steel market prices in February keep going down.

In addition, in the face of a severe situation, iron and steel enterprises proactively adopted measures to reduce production and limit production. During the period when demand has not yet fully started, they arranged to overhaul production equipment to reduce physical output and reduce material consumption.

As steel mills will cut their output more. Against the background of high inventory, reduced demand and obstructed logistics, steel mills will further reduce their output in the short term. According to statistics, as of February 21, 73 blast furnaces have been shut down or overhauled, which is expected to affect 210,000 tons of hot metal production per day. Inventories remain high in the short term. The demand in the first quarter will be greatly reduced compared with the same period of last year. It is difficult to digest the high inventory, and the steel mill and social inventory will increase in the short term. Downstream demand will start as the outbreak improves. With the gradual improvement or end of the epidemic, the impact on the steel industry will gradually weaken. With the support of a series of policies such as the realization of a well-off society and steady growth, steel demand is expected to rebound rapidly from the second quarter.

In summary, the last March of the first quarter will still be a very suitable ordering period. If you have procurement requirements, please contact us. We will serve you wholeheartedly.

Written by Kelly