The steel industry including production and trading in Northeast China has not felt much disruption from the new confirmed cases in the three provinces of Heilongjiang, Jilin, and Liaoning though they have taken up the major the new daily cases recently, market sources confirmed on Monday.
The little disruption in Northeast China’s steel operations is partly due to the fact that most of the steel capacities are located in Liaoning, while the pandemic outbreak has eased in the very province after the earlier resurgence in Dalian and Shenyang, market sources noted.
By the end January 25, among the 69 new confirmed local cases in China, 53 were in Heilongjiang and seven in Jilin, and one new death was reported in Jilin, according to the latest update released by China’s Health Commission, the outbreak has eased in Liaoning after the earlier resurgence in Dalian and Shenyang, Mysteel Global noted.
For 2020, the official data from China’s National Bureau of Statistics showed that crude steel output from the three Northeast China’s provinces accounted for 9.6% of the nation’s total output with Liaoning alone accounting for 7.2% of the country’s total, and as for run-of-mine iron ore output, the three produced 16.4% of the country’s total, and Liaoning was again in the lead with its own contributing to 15.4% of the country’s total.
Meanwhile, even for the steel mills in Heilongjiang and Jilin, they have not felt much adverse impact of the new COVID-19 cases either, according to local market sources.
“A few districts that are about 200km away from us have reported new virus, but we have not been notified of any measures that will be affect our daily operations,” an official from a steel mill in Heilongjiang province confirmed.
An official from a second steel mill in Heilongjiang reported the same. “Production and sales (mostly to other regions in China such as South and East China) are running as per normal, trucking has been affected a bit, but we have been relying on rail for cargoes transportation to and from the ports,” he said.
An official from a Jilin-based steel mill has not felt any inconvenience either. “We have just stocked up slightly more iron ore because of the upcoming Chinese New Year holiday (over February 11-17), and our finished steel is mainly transported via railway not trucks,” he stated.
On the other hand, winter months have never been a robust steel consumption period at all for Northeast China because of the extremely low temperatures with many days at -20 degrees C even in the daytime, a steel trader from Jinlin pointed out.
“In a cold day like this, it is hard to judge whether the pandemic has affected the market, though the impact will be rather evident in March if COVID-19 is still not under the control by then,” he added.
As for iron ore mining in Northeast China, an official with a small-scale iron ore mining company in Liaoning confessed that the resurgence of the pandemic in the winter has reduced the impact to the minimum, as mining operations usually slow down in winter months. “Our iron ore mining had been suspended even before the latest outbreak because it is too cold and the demand has diminished,” he shared.
A market source close to some iron ore miners in Heilongjiang noted the same, reporting hearing of one small iron ore mine being shut as it has granted their workers a longer break for the CNY, while the larger-scale iron ore miners’ business “is just as per usual”, according to him, adding that local steel mills usually procure iron ore supplies way ahead of the CNY to maintain operations during the festival because of the extremely cold winter days.
Written by Victoria Zou, zyongjia@mysteel.com and Olivia Zhang, zhangwd@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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