Steel prices have increased amid China reporting a rise in the COVID-19 cases with several key manufacturing cities seeing fresh lockdowns. First is the Tangshan city, the city in China, there has been a bit of a partial lockdown out there due to the spread of COVID-19.
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Phillip Capital sees it as a positive for the steel sector as it will upset the supply-demand dynamics globally. While for input costs that are for iron ore, as well as for coking coal, there could be a bit of pressure. Tangshan is important because it accounts for close to around 13 percent of the total Chinese steel production.
Speaking to CNBC-TV18, Ashima Tyagi, Editor - Indian & Asian Steel Markets at S&P Global Platts said, “In an environment like this in the Asian market, for sure, the other players do have room to increase prices, because of China's not supplying as much as they would be. But at the same time, their cost will go down. So maybe they will not be able to increase prices as much as they would like.”
On demand she said, “Demand in China, has not really short up as the way we were kind of anticipating. So in terms of manufacturing, though, January to February, manufacturing indices were better than last year. But what we are seeing right now is because of the poor property sector, even demand for household items, like refrigerators and washing machines, etc. is also slowing down. So in terms of demand, we are not seeing a very strong demand coming from China.”
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