Tangshan, a main steel production hub in China, affected by COVID-19 outbreak
Published: Mar 20, 2022 09:30 PM
Iron ore Photo:VCG

Iron ore Photo:VCG

Tangshan, the nation's largest steel-producing city in North China's Hebei Province, on Sunday imposed strict traffic controls and other anti-epidemic measures after new COVID-19 cases were reported over the weekend, leaving many steelmakers and related businesses to halt production and evaluate impact.  

After reporting seven new COVID-19 cases on Saturday, Tangshan implemented temporary traffic curbs on Sunday, which only allow essential and emergency vehicles to move in the city until further notice.

Steel industry insiders told the Global Times on Sunday that they had stopped operations while closely watching the situation and evaluating the possible impact on production and trade.

A local steel production and logistics company halted all of its trucks and work of most of its 400-some workers on Sunday until further notice. A manager at the company surnamed Liu told the Global Times that the impact was expected, since raw material supplies cannot be delivered. 

Liu said that the company understands the need for epidemic prevention and control, and is in full cooperation with health authorities, including coordinating nucleic acid tests.

Tangshan's strip steel production accounts for 58 percent of China's total output, section steel production takes 49 percent and hot coil production takes 14 percent, according to the Beijing Lange Steel Information Research Center.

The COVID-19 outbreak in Tangshan may impact transportation not just in the city but also surrounding areas, which will affect delivery of orders in the short term, analysts noted.   

Due to logistics restrictions and profit inversion, most of the local billet-rolling companies are in a state of shutdown, and some steel plants have stopped vehicles from entry, Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times on Sunday.

Though the number of cases in Tangshan is still relatively low as of Sunday, this is the first time the city found local confirmed cases since March 2020, according to an official report.

As of Saturday, a total of 472 close contacts and 897 sub-close contacts of the seven confirmed cases had been reported, all of whom had been transferred to designated areas for monitoring.

Disruption to the wider supply chain and production is too soon to evaluate, industry insiders said. 

At the moment, there's no particular impact, a source at Anglo-Australian mining group Rio Tinto told the Global Times on Sunday.

A person with a local steel industry association said that they were not clear about the situation at the moment. Tangshan port could not be reached for comment on Sunday.

Experts said that the high inventories of local steel plants will help the industry cope with the outbreak. Wang said that the average inventories of local steel plants can last for around 15 days.