With government support, the impact of COVID-19 on China’s steel industry is likely to lessen by H2 2020. Although the pandemic interfered downstream operations for a short time, a subsequent robust recovery could absorb a large percentage of this impact, according to Shen Bin, the Chairman of China Iron and Steel Association, quoted by China Metallurgical News.
Bin believes supportive policies and stimulus offered by the Chinese government would help the country tide over the crisis and limit the impact on the economy. Demand recovery will also be aided by a strong performance by the domestic infrastructure, real estate, automobiles, shipbuilding, home appliances, and other pertinent sectors in the second half of the year.
He also stated that the performance of raw material markets may surpass finished steel markets.
In January, domestic demand in China plummeted amid a surge in COVID-19 cases. The pandemic subsequently spread across the world, hitting China’s export orders. Bin believes recovery in exports is likely to remain slow even in the second half, but healthy recovery of the domestic steel market will dull the impact on overall demand.