China steel sector slows growth due to coronavirus outbreak

China’s steel sector was badly hurt by the novel coronavirus outbreak, with production slowing and prices slumping in the first quarter of this year, but analysts expect recovery in Q2 as demand rebounds.

Production of rolled steel totaled 267 million tonnes in Q1, down 1.6 percent year on year, as compared with an increase of 10.8 percent during the same period last year, data from the Ministry of Industry and Information Technology (MIIT) showed.

Steel prices also saw notable decline, with an index on rolled steel price dropping 5.7 percent year on year in Q1.

Affected by COVID-19, major steelmakers suffered from revenue loss of over 5 percent in Q1, while profits slumped by more than half, according to the MIIT.

Demand for steel is expected to bounce back in the second quarter as companies resume production and the country steps up infrastructure investment, analysts said.

The majority of steelmakers tracked by the China Iron and Steel Association had resumed production amid broader reopening in the Chinese economy, with 178 out of 191 enterprises back on track as of April 19.
Source: Xinhua