Hebei COVID19 Lockdowns May Hit Steel Demand - Analysts
CNBC reported that Singapore based Navigate Commodities co founder Mr Atilla Widnell told CNBC “Partial lockdowns have restricted the transportation of goods, resulting in a sharper build in inventories held by local steel mills rather than at stockists in the first half of January. We have heard anecdotal evidence that some stockists and traders are reluctant to tie up cash flow in case a ‘soft lockdown’ is prolonged or intensified.”
S&P Global Platts had said earlier this month “The Hebei curbs are unlikely to affect steel production for now, but they could hurt demand by spurring the manufacturing sector to stop work earlier than planned ahead of the major Lunar New Year holiday between February 11 and 17. Moreover, inventories are rising at the Jingye Iron & Steel mill in Hebei’s capital city Shijiazhuang. The government advised manufacturing and construction workers to return home before the peak holiday travel period... According to market sources, Beijing has done this in an effort to reduce the possibility of a spike in COVID-19 cases during and after the Lunar New Year holidays.”
The new wave of Covid-19 cases in China’s Hebei Province has triggered transport restrictions in the major steel producing region of China. Steel deliveries by truck have been suspended in Hebei, leaving rail as the only way to transport steel. Coronavirus cases in Hebei have been rising since the start of the year, prompting the province to lock down its capital Shijiazhuang and at least two other areas in an effort to contain the spread of the coronavirus.