SHANGHAI, Feb 14 (SMM) – China’s output of flat steel is expected to fall sharply in February, as the coronavirus outbreak constrains transportation of finished goods and raw materials, forcing steelmakers to curtail production.

The latest SMM survey showed that major steelmakers in China plan to produce 7.99 million mt of flat products in February, down 9.53% from the realised output of 8.83 million mt in January.

About 355,000 mt would be exported, down 14.9% from a month earlier, and volumes slated to enter domestic markets are likely to decrease 9.3% to 7.63 million mt.

February has only 28 days, which also accounts for the month-on-month decline in production.

Mills saw their inventories of finished goods rising significantly amid logistical constraints, with some running out of storage capacity. They are also grappling with tightening supply of iron ore and steel scrap.

Notably, steelmakers’ production plan is subject to change. Mills are likely to ramp up production after logistics and demand recover, which will grow supply pressure.   

Planned flat steel production for February

North China: production: 4.26 million mt, -11.4%MoM; exports: 105,000 mt, -33.12% MoM

East China: production: 2.48 million mt, -5.97% MoM; exports: 250,000 mt, -3.85%MoM

South central China: production: 895,000 mt, -21.79% MoM; no exports

West China: production 351,000 mt; -3.70% MoM; no exports