SMU Steel Summit: Global Perspectives on Pandemic

Jose Gasca, managing director at Metrading International AG, said the pandemic hit Turkish and Middle Eastern mills hard. China, the first to experience COVID-19 and the first to recover, is one of the few countries to increase capacity in the last six months during a period when other countries have reduced production and idled mills. China is “the driver of the bus,” taking the international market wherever it wants to go, said Gasca. Strong pandemic measures followed by government stimulus and infrastructure spending have spurred robust steel demand in China.

John Johnson, CEO of CRU China, added that steel exports from China fell during 2020, and China became a net importer of steel in June as demand outpaced domestic production. COVID-19 hit during the Chinese New Year, a traditionally slow period in China, with demand falling 14 percent in the first quarter compared to Q4 2019, but it bounced back in Q2.

China’s new five-year plan, due to start in 2021, will focus on a dual circulation economy, decoupling and decarbonization, said Johnson. For the Chinese steel industry, dual circulation will focus on domestic demand and implications for steel; decoupling will shift focus on “supply chain chokepoints” like iron ore and may become more regional; and decarbonization will support supply side reform, the rise of EAFs, and a focus on reducing CO2 and greenhouse gas emissions.

Will trade policy change following the U.S. election? Not likely, agreed the panelists. U.S. trade policy is expected to continue to be “quite protectionist.”

(Note: Conference attendees may access a recording of the panel discussion on the agenda section of the Steel Summit platform)