Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Major blast furnace-converter based steel producers in China’s Hubei province are operating at normal levels while electric arc furnace (EAF) mills are shut, according to China Metallurgical News.


Five major steelmakers, Wuhan Iron and Steel, Baosteel, China Bao Wu Echeng Steel, CITIC Pacific Special Steel Group, Daye Special Steel, Daye Huaxin Jinsheng Lan company and few other companies did not shut production during the Lunar New Year and they have continued to produce steel despite the coronavirus epidemic. Wuhan Iron and Steel’s daily average production was 39,700mt iron and 42,200mt steel. Production is normal at Daye Special Steel, which has a capacity of 3.5mn mt/yr special steel and 3.2mn mt of steel and Daye Huaxin. 


Baosteel’s production is expected to be affected by the logistics lockdown in Wuhan as raw material and auxiliary material transportation have stopped. The company’s inventories will support production in March, but if the lockdown continues, production may be disrupted in April.   


EAF based steel production were suspended in Hubei and Fujian province for new year and have not resumed production amid low downstream demand due to the virus quarantine. Construction activities have stagnated in the province and demand for construction steel has almost dropped to zero. Local government agencies are asking mills to resume production to help the economy. 


Social inventories of five major types of steel in January were 14.39mn mt, up by 5.20mn from the prior month. 


In 2019 Hubei’s crude steel output was 36.115mn mt, pig iron output was 27.652mn mt, steel production was 37.716mn mt. Hubei has more than 70 ferrous metal smelting and processing units. Wuhan city in Hubei province is the epicenter of coronavirus outbreak in China. 

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