TOKYO (Reuters) – Chinese steelmakers should cut production to reflect weakening demand from manufacturers amid a coronavirus outbreak as steel inventories climb in the world’s biggest steel producer, the head of Japan’s steel industry said on Thursday.
China’s crude steel output rose 7.2% in January from a year earlier, despite an extended holiday for Lunar New Year celebrations and curbs to rein in the virus.
And stockpiles of rebar, stainless steel and other products have built up dramatically in China after the epidemic stalled many construction projects and kept factories shut for weeks.
“We are aware that the steel stockpile in China is rapidly rising,” said Yoshihisa Kitano, the chairman of the Japan Iron and Steel Federation.
“We want to warn that Chinese steelmills should adjust their output to reflect declining manufacturing activities,” he told a news conference.
Kitano, who is also president of JFE Steel, a unit of JFE Holdings <5411.T>, said his company has cut its shipments of automotive steel as Japanese automakers slowed output in China, as well as in Japan, due to lack of auto parts made in China.
But Japanese steelmakers are seeing no impacts yet on their exports to Southeast Asia, he added.
(Reporting by Yuka Obayashi; Editing by Tom Hogue and Clarence Fernandez)