The impact of coronavirus outbreaks on steel companies

One is the difficulty of production organization. As a result of the epidemic situation, the logistics transportation in various places is blocked, the water transportation and the iron transportation are relatively good, and the automobile transportation is greatly affected.There are some steel pipe suppliers can not go out, gas storage serious, passive production cut maintenance increase, production and operation difficulties. Second, overall demand is weak. Recently processing enterprises have been returning to work, due to the field staff need to be isolated for 14 days, manpower is relatively tight, the overall start of the intensity is insufficient, demand than in previous years delayed about 30 days, steel transactions is in a stagnant state.

Third, after the Spring Festival steel inventory rose sharply. As of February 14, the total steel mill inventory and social inventory reached 30.418,000 tons, an increase of 13.236 million tons, or 77%. The next two to three weeks of inventory may continue to grow, steel prices formed pressure. Fourth, under the situation of high inventory and weak demand, the market of hydroponics green house is more pessimistic about the future, overlaying the difficulty of commercial payment, short-term funds are tight, there is the possibility of lowering prices to dump goods.Fifth, the profit of steel mills has shrunk sharply. At present, steel prices, short – process steel mill losses intensified, long – process steel mill profits have been close to the cost line, some high – cost steel mills began to lose money.

With the effective control of the epidemic situation, enterprises fully return to work, demand of single span greenhouse is gradually released, macro good policy is implemented, the market sentiment is improved, steel, spot prices are expected to resonance rise. Short – term steel market is still difficult, but medium – and long-term bullish. The steel price shock is expected to be weak in February to march, the steel price shock rise in the second quarter, may to June is expected to appear the first half of the steel price high. With the effective control of the epidemic, the contradiction between supply and demand of structural steel pipe alleviated, the steel price is expected to rise by shock in the second quarter, the price of raw materials in the upstream enterprises to return to work, transport to normal after the start of the fall, the “scissors gap” narrowing, steel mill profits will gradually repair. All these good results indicate the efforts we made.