With the Chinese government shutting Shijiazhuang and Xingtai cities in Hebei province, the steel industry in the country could be hit. Instances of the new variant of COVID-19 spreading in the two cities have forced authorities to levy severe movement restrictions. According to a China Metallurgical News report, the impact of the closure on production could be limited. Logistics to and from these cities, however, remain severely hampered.
Hebei is the country’s largest steel-producing province. In 2019, it produced 180mn mt of pig iron or 22pc of the national total. Steel production stood at 280mn mt, 23.6pc of the national tally.
The resulting changes in the steel market in Hebei could have a decisive impact on the country’s market, believe industry participants. On the price front, market opinions were mixed. Some believe activity in northern China has already dipped on harsh winters. Renewed COVID-19 restrictions, therefore, would not have any impact on demand or supply. Others, however, believe the uncertainty could lead to panic buying for the post-winter requirement and lead to pressure on prices once restrictions are eased and businesses return to normal.