Losses, virus outbreak closed EAF steelmakers in Hubei

SHANGHAI, Feb 8 (SMM) – All major electric arc furnace (EAF) steelmakers in Hubei province, the hardest hit region amid the coronavirus epidemic outbreak, have been closed, showed an SMM survey, as losses deepened.

As of Thursday February 6, EAF steelmakers could see a loss of 387 yuan/mt on rebar, according to SMM calculations.

Significant losses, coupled with a potential shortage of labour force amid the outbreak, are likely to prompt EAF steelmakers in Hubei to further delay their resumption, even as Hubei authorities said that enterprises could resume work from February 14.

Blast furnace (BF) steelmakers in Hubei, however, are maintaining normal production, but fears of raw material supply shortages are growing as the region remains locked down.

Hunan, which is bordered by Hubei to the north, is also beleaguered by logistics constraints. BF steelmakers in Hubei and Hunan told SMM that their existing stockpiles of raw materials could ensure normal production for a maximum of 30 days, which means that they will have to curtail production sharply if the epidemic has yet to be effectively curbed by early March.

SMM data showed that crude steel capacity in Hubei accounts for 3.85% of the nationwide total.