Under the impact of new coronavirus, how will the steel market perform after the festival

The spring of 2020 is particularly cold. The emergence of the new coronavirus epidemic in Wuhan has aroused widespread concern of the whole society and even the whole international community. On January 31, the World Health Organization (who) emergency committee held another meeting to list the epidemic as PHEIC, i.e. "public health emergencies of international concern". Affected by this, the good start of the steel market expectations have changed, Then how will the   steel   market go after the festival?

The steel demand delay after the festival has become a foregone conclusion.
In order to control the epidemic, the general office of the State Council issued a notice on January 27 to extend the 2020 Spring Festival holiday to February 2, and to start normal work from February 3 (Monday). At the same time, some provinces have further delayed the start-up time according to their own conditions. In most areas, the start-up time is about 10 days later than the original planned normal start-up time. In some areas with severe epidemic, the start-up time will be further delayed. The demand for steel will decline significantly in February, and the recovery of steel demand may be delayed to the end of February or the first ten days of March.

Affected by the delayed start-up, the steel storage period is 1-2 weeks longer than that of previous years.

As governments at all levels have taken strong control measures, there is no exponential outbreak of the new coronavirus. Generally speaking, the number of suspected patients can be used as a leading indicator of the number of confirmed cases. If there is a turning point for suspected cases, the market bearish sentiment will be significantly reduced, and the progress of the epidemic still needs close attention.

Generally speaking, the coronavirus epidemic is still in the growth period, and there is no turning point of sentiment. The accumulation of multiple bad air during the Spring Festival holiday or the concentrated outbreak on the first day after the festival has a great impact on the disk. From the basic point of view, although the epidemic has an impact on both sides of steel supply and demand, the impact of the extension of the Spring Festival holiday on the steel demand side is significantly greater than that on the supply side. The contradiction between steel supply and demand in February will be more prominent, the inventory accumulation will exceed that in previous years, and the spot market may accelerate the search for the bottom. With the epidemic gradually under control, the holiday negative has been released, and the steel price is expected to stabilize gradually. Although the steel demand will be late, it will not be absent. Once the demand recovers gradually in the later stage, if the state has issued a strong stimulus policy after the epidemic, it is not ruled out that the steel price may rebound in retaliation.