South China Morning Post reported that latest coronavirus outbreak in the northern steelmaking hub of Hebei Province has triggered curbs on transport, including truck deliveries of steel. Shanghai based data Analytics Company Fubao Information in a research note said “Larger steel mills are still operating. There would be disruptions in the logistics supporting production and delivery of finished products, because Hebei has closed major highways leading into Shijiazhuang, where some of the province’s major steel factories are located. Demand for steel, which shot up earlier this year as a result of strong infrastructure and property investment in China, is also expected to ease in the coming weeks, as the cold snap in the nation’s north and the upcoming Lunar New Year holiday in February slow construction activity.”
Fubao Information added that “As Hebei enters a state of war with the coronavirus, together with a deep plunge in the temperature, the steel demand cannot be wholly met. But given the already high prices of steel and production, downstream demand is relatively weak, so there is no major driver to support a price jump. In the short term, the market will be in a state of shock and will correct.”
Hebei reported 51 new locally transmitted coronavirus infections and 69 asymptomatic cases on Wednesday, after 63 infections were reported on Tuesday. Among the 51 new infections, 50 were recorded in Shijiazhuang, the capital city of Hebei, and one case was in Xingtai, a neighbouring city.