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Kallanish Steel Weekly: Is the impact of coronavirus already easing on raw materials?
Last week iron ore in China, Turkish scrap and CIS billet prices all recovered as the impact of the coronavirus on the market appeared to ease somewhat.
According to Kallanish indices, iron ore jumped back to close to $90/tonne cfr Qingdao, fuelled by the reduction in stocks at Chinese ports. Scrap HMS 1-2 also recovered, moving to $274/t cfr Turkey. The rebound in both main raw materials also supported the recovery in billet prices in the CIS, returing to almost $400/t fob Black Sea.
The news coming from China does not indicate that the problems caused by the virus are over, but a normalisation of the market during the next week could be possible. In the construction sector, for example, some Chinese sources noted that construction sites could be restarted after 20-25 February.
Some uncertainties nevertheless remain, as the impact is spreading further in many sectors. At the end of last week, for example, FCA confirmed that it had halted production at its car plant in Serbia due to the lack of some components from China. This is the first direct impact on carmaking in Europe, after similar moves were announced by other companies in Asia.
In China specifically automotive market demand has been stuck at low levels since vehicle manufacturers entered the holiday period in January. Combined with the coronavirus epidemic, this weak demand may last for several months. Baosteel, a leader in the sector in China, confirmed that its auto sheet business may feel the pressure in the next couple of months as orders dwindle.
Kallanish articles are only available for active subscribers and clients currently on trial. If you already have login details, please login below to continue.
Truly global, user-friendly coverage of the steel and related markets and industry that delivers the essential information quickly while delivering on most occasions just the right amount of between-the-lines comment and interpretation for a near real time news service of this kind.
Anonymous
Very good overview of the weekly steel market.
Anonymous
Truly global, user-friendly coverage of the steel and related markets and industry that delivers the essential information quickly while delivering on most occasions just the right amount of between-the-lines comment and interpretation for a near real time news service of this kind.
Anonymous
Very good overview of the weekly steel market.
Anonymous