Activity in the global steel and ferrous raw materials markets is on hold as market participants await clarity amid the extended lunar new year holiday in China, following the coronavirus outbreak originating in the Chinese city of Wuhan, Hubei province.China's General Office of the State Council yesterday extended the national 24-30 January lunar new year holiday to 2 February. But some localities — Shanghai, Jiangsu and Zhejiang province — have extended the holiday to 9 February, and more such extensions could follow. The effect of the virus outbreak on steel and related raw materials markets are still relatively muted. The lead-up to and the month following the first day of the lunar new year holiday in China are typically lull periods and any significant impact on the markets is only likely to emerge after the end of the official holiday period in the second half of February. Most construction projects in China are idled for a month in winter. The national holiday lasts for a week, but migrant workers are often given a month or longer to travel to their home towns.A major steelmaker in east China has indicated that its operations will continue as usual over the holiday and workers are returning from the break as scheduled, a mill official said.Blast-furnace-based steelmakers maintain operations over the holiday to keep crude steel output from dropping significantly. This sends steel inventories soaring to annual peaks in late February and early March each year.Scrap-based steelmaking from electric arc furnaces (EAFs) shut down over the holiday and the outages are likely to be extended. EAFs account for less than 10pc of overall crude steel output.The Shanghai Futures Exchange (SHFE) is scheduled to resume trade after 2 February despite the holiday extension to 9 February in Shanghai.Most participants that Argus spoke with said they are waiting for their companies to tell them when they will need to return to work and some have been asked to work from home.The Chinese government has adopted traffic controls and quarantine measures in many cities to prevent the virus from spreading. Public transportation such as long-distance bus services and taxis were suspended in many cities. In Hebei province, 37 bus lines have suspended operations from today, state-owned news agency Xinhua said. This includes bus services in major steelmaking hub Tangshan, potentially affecting the ability of mill workers to get to plants. Railway services were halted in some regions, including Hubei province.
Source : https://www.argusmedia.com/ru/news