Chinese domestic steel prices are likely to face more downward pressure this month amid widespread pessimism around the world due to the rampant spread of COVID-19, according to Wang Jianhua, Mysteel’s senior analyst.The daily avalanche of bad news from abroad reaching China is creating bearish sentiment across many industrial sectors including steel and whose depressing heaviness outweighs any internal factor that may prop up steel markets, Wang suggests in his outlook posted on March 31. “All categories of steel products have room to decline, though the pace or time of the decline may vary,” he warned.Throughout March, Mysteel’s national HRB400 20mm dia rebar benchmark price declined by a total of Yuan 18/tonne ($2.5/t) to Yuan 3,611/t as of March 31 and that of 4.75mm hot-rolled coil slipped Yuan 75/t throughout the month to Yuan 3,446/t. The national benchmark price of 1.0mm cold-rolled coil, moreover, slumped Yuan 227/t over the period to Yuan 4,034/t as of March 31, according to Mysteel’s data tracker. All prices include the 13% VAT. Overwhelming concerns of economic recession amid COVID-19 threat Though China has helped to tame the fatal virus disease at home through the adoption of tough measures, elsewhere in the world there is no clear sign of improving conditions. This has triggered widespread and severe concerns that the global economy is falling into recession, or worse, according to Wang. A market source in Shanghai agreed. “The previous optimism of a domestic demand recovery is now completely replaced with the pessimism over wider economic slowdowns,” he admitted. Many global financial institutions have already reached a consensus that a global economic recession looms, with some media saying that the shock of COVID-19 on global business could be more damaging than the 2008 global financial crisis and even the Great Depression of 1929-32. International Monetary Fund chief Kristalina Georgie candidly acknowledged on March 27 that the global economy is now in a recession thanks to the COVID-19. “The length and depth of this recession depends on two things: Containing the virus and having an effective, coordinated response to the crisis,” she added. As of April 1, confirmed COVID-19 cases totalled 754,948 across 203 countries worldwide while the death toll had reached 36,571, according to a real-time tally of the World Health Organization.
Source : https://www.mysteel.net/article