This industry is thrilled by the unusual corona spread in China

China’s re-proliferation of Corona 19 is unusual.

In particular, the situation in Hebei Province, which is close to Beijing, is known to be serious. Not long before the Lunar New Year (Chinese New Year), tensions are rising. When Corona 19 first broke out in Wuhan last year, there is a precedent that the epidemic spread more rapidly due to the Lunar New Year period.

Shijiazhuang City, Hebei Province, about 300 km from Beijing, is counted as the new epicenter of the re-spreading Corona 19. This is why the Chinese government hastily blocked the city.

Everyone is in a state of super tension, but the industry that is watching this situation with breath is the steel industry.

This is because about 20-25% of the steel produced in China comes from Hebei Province.

CNBC in the US quoted a report from S&P Global Platts, an energy and raw material information provider, saying, “It will not have a significant impact on steel production right away.” If it closes, it could hit demand.”

Naturally, stock is building up. This is because some areas in Hebei Province are blocked, and the areas around the steel mills are also stuck. Trucking ceased, and railroads became the only mode of transport. S&P Global Platz said, “The’Jingye Group’, a steel company in Shijiazhuang in Hebei Province, is representative.”

The containment area could be further increased. Is it because of this? Some say that buyers have temporarily suspended cash flows in preparation for an extended blockade.

In the second half of last year, Chinese steel prices rose. However, as Hebei Province entered a’pause’ mode, demand fell, and in recent years, it is showing a downtrend. There is also a reason that construction work has been suspended in several places due to a cold wave in China.

The problem is in the future. Blockade of steel production areas will affect iron ore prices as well. The price of coking coal for fuel is already rising rapidly.

After all, the Chinese New Year is the key.

Unlike last year, if Corona 19 is properly controlled during the Lunar New Year, demand for steel is expected to increase again. This is also a good news when several construction works resume in spring. However, if the Corona 19 cannot be properly controlled, it will be a headache for China.

It is worth noting that China is the world’s No. 1 steel producer. The international community is paying attention to steel prices in this country, which dominates the prices of global steel products. The eyes of our steel industry to seize opportunities are also pointing to China.

Reporter Lim Ju-ri [email protected]