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Under the virus outbreak, overseas steel mills began to reduce production on a large scale Steel prices into the "bear cycle"

The OECD's chief economist, Mr Boone, said the current global economic hiatus was equivalent to 25 to 35 per cent of global GDP. On March 23rd the head of the International Monetary Fund said: "Global growth in 2020 may be in recession, at least as bad or worse as the financial crisis, but we expect a rebound in 2021." "

We speculate on late-stage production changes, taking into account changes in global crude steel and pig iron production during the 2008 financial crisis. In August 2008, financial institutions in Europe and the United States concentrated on the huge losses caused by the U.S. subprime mortgage crisis, financial risks quickly spread to the entity, in September began the global except China, the year-on-year decline in crude steel and pig iron production, and then the year-on-year decline continued to expand, from November 2008 to 2009, Global crude steel and pig iron production, excluding China, declined by more than 20% year-on-year, and until November 2009, crude steel and pig iron production turned negative from negative year-on-year. From October 2008 to September 2009, the average year-on-year decline in global crude steel and pig iron production, excluding China, reached 28.13% and 28.93%, respectively.

Global pig iron production in January-February 2020, excluding China and countries and regions, has been down 4.3% Year-on-Year, and the global steel production in March was more concentrated. According to the latest estimates of the European Center for Disease Control and Prevention, the new corona outbreak is less likely to end in a summer of rising temperatures. Even if the global outbreak is largely contained by the end of the second quarter, the impact on the real economy will run through through 2020. We measured the year-on-year decline of 5%, 10% and 20% respectively, and in 2020 global output except China's foreign pig iron production will decrease by 22.8 million tons, 45.61 million tons and 91.23 million tons, respectively, respectively, and will reduce iron ore demand by 36.49 million tons, 72.98 million tons and 14.596 million tons, respectively. Later iron ore demand will face greater downside risks.

In addition, from China's steel exports, since 2015, China's steel exports reached a record 112 million tons, and then year after year, to 2019 steel exports fell to 64.29 million tons, down 7.28 percent year-on-year, down 42.8 percent from the peak in 2015. China's steel exports from January to February 2020 were 7.811 million tons, down 2.886 million tons year-on-year, down 27%, the fastest rate since March 2018.

According to the Ministry of Finance on March 17 issued "on the increase of export tax rebate rate for some products", some of the steel products to increase the tax rebate rate to 13%, which will effectively reduce the burden on enterprises, enhance the enthusiasm of enterprises to export steel products. However, although the epidemic has been well controlled at home, but the overseas epidemic is still spreading, resulting in a decline in overseas orders, steel exports have begun to appear, steel billets and hot rolls and other imported resources began to increase, the decline in exports is expected to be difficult to ease in the next few months, Falling exports and increased imports will put greater pressure on the supply of resources in the domestic steel market.

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