The potential impact of the COVID-19 outbreak was the major topic of discussion at the 82nd annual IREPAS conference in Belgrade from March 1-3.
The best case scenario is that both the global and Chinese economies suffers for two months because of stilted trade and frazzled consumer confidence. However, the worst case scenario is that both the steel industry and stock market are hit the way they were in 2009. In fact, the stock market had its poorest showing this week since the Great Recession.
Conference attendees also heard that, as a consequence of the virus outbreak, Chinese steel mills have large unshipped inventories, and that Chinese exporters expect prices to decline.
The first offers of China-origin billets to the Mediterranean were also heard, meaning that China is returning to the export market.
Producers at the conference emphasized there is almost zero margin between scrap and rebar right now, and that demand—in addition to COVID-19—has been affected events both political and economic. Unless scrap and iron ore prices fall, the market will remain near its bottom.