China’s biggest steelmaking hub, Tangshan, ordered emergency traffic controls and mass coronavirus tests with a rapid increase in daily count.
According to a report, on 19 Mar’22, the Office of the government wing in charge of prevention and control of the new Covid epidemic issued a notice to various cities, including Tangshan, to tighten control measures against the spread of coronavirus.
Current market situation
Steel production of large mills in the short term will not be affected as they have sufficient stock of raw materials. However, smaller mills are currently in shutdown mode because of rising energy (oil and gas) prices and weaker demand for billets. Although the ex-factory prices of steel billets have dropped, the transactional prices of steel billets are still relatively high.
Meanwhile, some steel traders have temporarily retreated due to rising infections but the quotation and sales of most market resources are still on.
Logistic disruptions
The recent policy release has impacted warehousing and logistics operations in Tangshan. Heavy vehicles are not allowed to enter the factory for loading while entry of small vehicles is prohibited in the afternoon.
This emergency state in Tangshan is affecting strip and section steel production and transportation of resources has been greatly impacted. Hence, the main surrounding markets of Tianjin and Shengfang, and other areas – Cangzhou, Baoding, Shijiazhuang, and Handan – have been affected.
Operations at ports have slowed down, and the overall transportation volumes of resources, whether from the factory, collection port, or at any intermediary level, have also showed a slight decline.
It may be noted that Tangshan, with an annual output of 160 million tonnes (mnt), accounts for 56% of total steel output in Hebei province and 13% of the country’s total steel output.
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