Benchmark steel futures in China pulled back on Tuesday after hitting near two-month highs in the previous session on rising worries over the coronavirus pandemic and its impact on the world economy.
Construction steel rebar on the Shanghai Futures Exchange ended down 0.2% at 3,555 yuan ($507.76) a tonne. Both hot-rolled coil, used in cars and home appliances, and stainless steel slumped 0.7%.
Border closures and travel bans worldwide have intensified as the virus spreads at a breakneck pace, feeding a steady rise in new infections and deaths. In China, where local transmission of the disease has slowed, authorities are struggling to control new infections from abroad.
“Even though China’s coronavirus cases are subsiding, supply chains will remain broken from the suspension of factory operations globally, and as demand from the rest of the world shrinks, dealing a double blow to China’s factories and exports,” said Iris Pang, ING chief economist for Greater China.
China on Monday reported dismal industrial production data for the first two months of the year, indicating a dramatic downturn for the world’s second-biggest economy due to the pandemic.
ING has downgraded its growth forecasts for China to 3.6% for the first quarter from 4.4% previously, and to 4.8% for the full year from 5.2% earlier.