Coronavirus: Chinese steelmaking hub hit, with highway closures reducing output and delivery
- Dozens of new Covid-19 cases detected in Hebei province this week
- But analysts say the surge in coronavirus infections has not had a major impact on Hebei’s overall manufacturing and trading capacity
Mainland China’s biggest coronavirus outbreak in months – in the northern steelmaking hub of Hebei province – has triggered curbs on transport, including truck deliveries of steel.
But analysts expect the price of the metal to drop in the short term after a strong rise supported by the nation’s economic recovery.
“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,” said Fubao Information, a data-analytics company based in Shanghai that focuses on metals, in a research note published on Wednesday.
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,” the analysts said.