On April 30, Baris Bekir Cefti, Director of Strategic Planning of the World Iron and Steel Association, issued a document introducing the production and supply of the global steel raw materials industry (iron ore, metallurgical coal, scrap steel) under the epidemic.

Australian Iron Ore

And metallurgical coal production is basically unaffected

Chefty pointed out that as the current major supplier of global seaborne iron ore and metallurgical coal, Australia ’s exports of iron ore and metallurgical coal accounted for about 60% of global seaborne supply in 2019.

Therefore, if the supply of Australia is interrupted, it will have a disastrous impact on most steel manufacturers in the world.

Fortunately, during the large-scale spread of the New Coronary Pneumonia epidemic, Australia has shown considerable resilience in both iron ore and metallurgical coal mining and logistics and transportation.

In fact, Australia has even increased the supply of iron ore to the maritime market. The world ’s largest bulk export port, Australia ’s Port Headland ’s iron ore exports hit a record high in March 2020.

Statistics of metallurgical coal throughput at the two terminals in Australia ’s Hay Point and Dalrymple Bay (total exports accounted for more than half of Australia ’s metallurgical coal exports) show that metallurgical coal production in Australia The logistics chain was basically not affected by the epidemic.

Australia ’s iron ore and metallurgical coal mining operations and corresponding logistics are largely automated, which may be an important reason for its greater resilience in the event of an outbreak.

Brazilian iron ore production has not been affected, but may face operational difficulties

Chefti said that as the world's second largest supplier of maritime iron ore, Brazil's main iron ore mining and logistics business has not been seriously affected by the new coronary pneumonia epidemic.

However, Vale, the world's largest iron ore producer, said the company may face labor-related operational difficulties and may need to take corresponding emergency measures based on the development of the epidemic in Brazil.

The company also said that the outbreak caused a delay in the restart of its iron ore mining and processing business authorization process, which was suspended after its dam broke out last year at its dam in Bromaden, Minas Gerais, Brazil. .

Limited production of iron ore and metallurgical coal in other regions

It is common for mining companies around the world that the new coronary pneumonia epidemic has caused delays or cancellations of exploration activities and investment plans.

In the United States, mining is currently included in the list of basic industries and is allowed to continue operating during the epidemic. Nonetheless, due to the severe impact of the outbreak on the economy, many American iron ore companies and coal mining companies have ceased production.

The nationwide blockades in South Africa and India and restrictions on mining activities in some Canadian states have resulted in a significant reduction in their mining output. The iron ore output of these three countries in 2019 accounts for about 10% of the global maritime iron ore supply. Therefore, these interruptions have a greater impact on the global iron ore supply overall.

In addition, since India is one of the world's major importers of metallurgical coal, the nationwide ban on sales may have a greater impact on the demand for the marine metallurgical coal market.

The epidemic affects scrap production and recycling

Chefti pointed out that as consumers postpone the purchase of new household appliances or cars, companies postpone investment, and demolition activities slow down or postpone, and the region and even the entire country implement closed management and social isolation measures, the generation and recycling of scrap steel After a certain impact, the amount of scrap steel dropped significantly. But this situation will gradually improve with the improvement of the epidemic situation and the abolition of restrictive measures.

The steel raw material market may fluctuate sharply

Chefti said that although China ’s industrial production and people ’s lives have basically returned to normal, and the situation in Europe is gradually improving, we should note that there is still considerable uncertainty in the long-awaited recovery; we should expect In the process of recovery, the steel raw material market may fluctuate sharply.

Chefti believes that at present, uncertainty remains about how long the epidemic will last and how far the epidemic will spread globally. At the same time, the inconsistent pace of recovery between different regions and different industries may also cause fluctuations in the commodity market for a period of time.