From the recent situation, there are three factors that affect the reduction of overseas steel production.
First, before the epidemic, global economic growth was already weak. Overseas steel companies began to reduce production in the fourth quarter of last year and continued to the first two months of this year. It is expected that the reduction in production will continue when demand has not improved.
The second is the current shutdown and reduction of production to prevent the spread of the epidemic and ensure the safety of personnel. The overseas epidemic situation generally began in March and gradually intensified. It is expected that the production suspension and production reduction will be reflected later.
The third is that the impact of the epidemic on consumption will gradually be transmitted to the upstream industry. This is the most fatal and will accelerate the reduction of overseas steel mills' production.
The world's largest exporter of scrap steel, the decline in scrap prices in the United States, has led to a drop in global scrap prices (some of which may be related to China's restrictions on scrap imports in the second half of last year). When steel demand and prices fall, overseas iron and steel plants are the first to bear the brunt when iron ore prices remain high, facing the greatest pressure.