Covid-19 Impact on Metal and Mining in the Chemical and Materials Industry

Covid-19 Impact on Metal and Mining in the Chemical and Materials Industry

  • Chemical and Materials
  • Jun 15, 2020

INTRODUCTION

Metal and mining industry is one of those industries that have been severely impacted due to the outbreak of coronavirus globally. The prices of steel and other metals have shown different behavior due to demand and supply scenario change. In response to the spread of the virus, some governments have seized the borders and have imposed large scales quarantines and social distancing measures to minimize the spread of the virus any further. The safety and well-being of workers were rightly the top priority of any country, but now companies must consider the economic effects of the pandemic, which are now apparent.

To keep the well-being of employees in concern, companies have taken drastic measures such as asking non-operational staff to work from home to scaling back production; even many of the companies have reduced their operations and manufacturing capacities to get less impacted with the global pandemic. Such steps have resulted in reduced productivity and profits of many industries, including metals and mining precipitously. To come back on track, the companies need to make strategic choices for building their cost resilience to prepare themselves for the recovery, as well as even rethink on their new operating models

协会和公司专业人士提供的一些观点是:

  • “Companies are facing restrictions in logistics and transport, trades have been muted, prices of raw materials and steel have slid, which is causing the market’s value to decline”, by China Iron & Steel Association
  • 安赛乐米塔尔表示:“我们认为,冠状病毒的影响可能会对中国的需求产生短期负面影响,对其他地区的需求影响较小。”
  • “We reviewed the situation arising in China due to the virus outbreak in the initial weeks. While we do not depend on China as a market for steel, we do source some of our consumable items from it. We are thus trying alternative supply sources in countries like Turkey and Brazil,” by TV Narendran, chief executive, Tata Steel.

IMPACT OF METAL AND MINING INDUSTRY

冠状病毒的爆发主要从2020年3月开始显现其影响。金属和采矿业的平均股价下跌了近10%,许多独立公司的市值损失了约40-50%。COVID-19的作用已经从2020年3月的中等水平转变为2020年4月的高水平,并且仍在积极增加。矿业市场的一些主要参与者,如必和必拓(BHP Billiton)、力拓(Rio Tinto)和英美资源集团(Anglo-American)迄今已报告部分停产,因此,该行业迄今为止几乎报告的产量损失超过30%。

已经观察到,由于近近期需求,各种商品如铁矿石,铜,煤和锌等价格下跌> 5%。这一趋势的唯一例外是黄金。自今年年初以来,黄金价格涨幅约为8%。

CHANGE IN PRICES OF COMMODITIES FROM 2019 TO 2020

商品名称 %价格变动
2.67%
Lithium 44..81%
沥青 27.26%
0.67%
26.97%
7.14%
Lead 9.00%
Nickel 11.73%
铁矿 0.50%
Aluminum 9.58%
Tin 13,38%
17.53%

Source: TRADING ECONOMICS

上面提到的图表明确指出,与去年(2019年)相比,几乎所有商品的价格都拒绝了,除了最近有几次建造的。

China accounts for more than 20% share in the global supply chain of intermediate products which includes metal and metal products. Thus, the disruption which has been caused due to COVID-19 in China only is expected to repeat on the economy in various countries worldwide. It is expected that the metal industry of European Union will lose over USD 1 thousand million if China exports reduced by even 2%. The steel manufacturer in Europe are cutting production and idling factory lines in which the workers are not working as because of declining orders, a lack of available staff or as a safety precaution against coronavirus. As per the commodity consultant, James Campbell at CRU, “This is going to be a loss making year for the European steel industry.”

Due to the downfall in the metal and mineral industry, the other industries that are dependent on supply of ferroalloys and steel, such as automobiles, foundries, have been shutting down across global. As per some of the experts, it is not because of coronavirus spread that metal industry is facing dip in the demand; rather it is the quarantine or the shutdown that is eroding the demand. Ideally there are two aspects of looking into the problem of demand:

  1. The quarantine
  2. 中期地平线的经济崩溃

Along with this, various countries are keeping track of Chinese activities that they did to bring back the industry on track. The Chinese steel consumption from January 2020 to February 2020 increased by almost 5.5%. The production in China grew by 3.1% in March and April. Also, the investment in the fixed assets has increased by 24.5% and the investment in the infrastructure has increased by 30.3%, which is even higher than the decline during the crises of 2008-2009.

对铁矿石的影响

The spread of coronavirus has impacted iron ore production and its pricing too. Though compared to 2019, there has been an increase of 0.5% in the pricing but it has faced a dip that no one has expected. The price in 2019 was USD 90.4/tons, and till March in 2020, it averages $83.5/tons. In terms of production, it is expected that iron ore may show a growth of 0.8% in 2020, as compared to 4.7% growth in 2019. The slow growth is due to government lockdowns around the global disruption in operations. The supply chain has also disrupted as many mines are forced to shut their operation in Canada, South Africa, Peru, and India. Till March 2020, the steel production in China is averaged 3.6% as compared to 7.7% in 2019. As China is also facing the logistic issue, which temporarily has increased China’s demand for seaborne iron ore post-April 2020.

对煤炭的影响

煤炭是另一种受到COVID-19严重影响的商品或金属。由于来自廉价天然气和其他可再生能源的竞争,煤炭需求正面临着过去10年的放缓。随着世界逐渐远离化石燃料,煤炭工业急需复苏。除此之外,这场大流行还为其垮台增加了一个重要原因,并使情况变得更糟。宾夕法尼亚州、伊利诺伊州和弗吉尼亚州的大多数公司已经暂时停止运营,以控制病毒的传播。

By January, before the pandemic out broke in the U.S., the drop in coal production was forecasted to 14% in 2020. But as the coronavirus speeded in the country and the mild winter which requires less electricity at heat homes, the downfall is now expected to be more than 25% by the end of this year.

2020年4月,由于冠状病毒危机的蔓延,印尼煤炭出口创下2009年6月以来的最低水平。2015年4月至2019年4月,印度尼西亚的平均出口量约为3200万吨,2020年4月降至近1800万吨。另一方面,许多国家的煤炭进口也受到影响。

例如,

  • India’s coal import in March 2020 was at 15.74 million tons which were low by 27.5% as compared to import in March 2019. Though from April 2019 to March 2020, the total coal and coke imports stood at 242.97 MT (provisional), which is 3.24% higher than from April 2018 to March 2019, the major low will be reflected in the statistics of 2020 fiscal year. As per Vinaya Varma, managing director and chief executive of mjunction services, “The lockdown imposed across the countries due to novel coronavirus pandemic has had a cascading effect on this sector. There was a significant drop in India’s coal import volumes due to both demand and supply-side factors, i.e. offtake, consumption, logistics, and dispatches.” Moreover, as per the statement by Coal Minister Pralhad Joshi, to stop the substitutable import of coal in the next three to four years may further present a dip in the coal industry.

对钢材的冲击

由于其主要消费者,汽车和建筑和基础设施的需求降低,钢铁行业面临多次击中。汽车占15-20%。在2020年,由于冠状病毒的爆发,钢铁产量逐渐下降。印度等国家的钢铁工业依靠中国各种耗材包括锰,耐火制品和钢厂的化合物,电极和辊。因此,对中国行业的任何影响都将对所有依赖中国的国家具有直接影响。由于对进口的过度依存,原材料价格由多个折叠射击,从而使最终产品昂贵。最近最大的炼钢公司塔塔钢铁公司最近决定减少对中国供应钢制投入的依赖。与塔塔钢铁一起,许多其他公司正试图将其供应从中国转移到土耳其和巴西等其他国家。这是政府在与钢铁制造公司讨论中的讨论,以使供应链危险的步骤之一。

由于对钢材的需求急剧下降,各国政府已迫使制造商将产量削减到产能的近50%。除此之外,封锁和移动限制也影响了成品的及时交付和调度。在印度这样的国家,几乎80-85%的卡车都不动,这使得情况更加恶化。因此,官员们要求政府允许该行业的卡车运输,因为卡车是任何行业的主要组成部分。

根据印度钢铁协会(ISA)提供的统计数据,2020年印度的钢铁需求将面临7.7%的萎缩。ISA估计,到2020年2月,钢铁需求将增长5.1%,达到1.067亿吨。但在分析了COVID-19造成的影响和情况后,这一估计被修正为9370万吨。印度钢铁协会助理秘书长阿纳布·库马尔·哈兹拉(Arnab Kumar Hazra)表示,封锁将影响钢铁需求近1300万吨。

对其他商品的影响

COPPER:自2020年初以来,由于各种最终用行业的需求较低,铜价已下降了近15%。然而,随着中国大多数制造商/冶炼厂,随着国家慢慢摆脱大流行,预计铜价和价格将反弹。

锌:Through the prices zinc rose rapidly from 2015 to 2019 will almost an increase of 32%, now facing downfall of around 18% from 2019 to 2020.

镍:尽管经济衰退,镍的表现优于其他商品。价格也表现出积极的迹象以及供应。预计到2020年底,镍的需求将增加约3%。

彼得IBLE STEPS TO BRING METAL AND MINING INDUSTRY BACK ON TRACK

To manage this global crisis, mining and metal leaders are working mainly on three aspects: Respond, Recover and Thrive. Some of the important immediate steps that are advised to metal and mining leaders include:

  • 通过每种可能的方式保持关键服务,同时将员工的安全视为最优先级。
  • Focus should be more on understanding the financial situation and accordingly release the cash maintain financial viability even through uncertainty.
  • 重新思考已完成工作的策略,通过使用自动化和数字化提高协作能力。

Also to lift up themetal and mining industry,采购领导人扮演的角色也至关重要。通过制定战略选择,负责减轻供应链风险,覆盖和保护现金,以提高整体生产率的提高。首席采购官(CPOS)应与业务团队和市场参与者密切合作,以便在可以停止的情况下对开支的战略举措,这可以停滞不前,可能会缩小,必须持续什么。有人提出了一种控制塔方法,以监测和挑战所有公司的支出。

在几乎每个行业面前出现的主要挑战之一是对一个或两个供应商的依赖。这是最重要的,制造商应通过越来越多的原料供应商减轻其风险并降低损失,以便在大流行或危机中,运营不会受到这种程度,在它变得恶化之前可以控制情况。

CONCLUSION

Covid-19大流行围绕地球的传播立即对全球经济产生影响,几乎都在所有industries including metal and mining. In the crises, some of the new players might get more affected than others because of the initial challenges that a business faces and then the challenges brought in by the pandemic. But, for a positive aspect, due to this pandemic, a real sense of togetherness has emerged among the players of the industry to stop the spread of this virus.

The spread of coronavirus has taught many of the players in the market how to better manage their business and always be ready for such situations too. In the mining industry, the impact has varied from commodity to commodity.

例如,

  • Where gold is experiencing high price along with thermal coal and uranium, iron ore is feeling pressure to sustain as it is more dependent as consumer demand.

So, the steps to bring back the economy should be based on commodity rather than entire industry. Also the slowdown has resulted in some new opportunities and has opened doors for new ways of doing business. Since, the metal and mining are working on the same old patterns without much exploring in the ways of doing business. Now, the manufacturers and suppliers are exploring other methods such as atominization, digitization and remote controlled operations. Not only the manufacturers, but also the consumers are welcoming the online delivery of their products and have resulted in reducing human efforts.

Slowly and gradually things are coming back on track. But within few years, by the mutual efforts of the government and manufacturers, the impact can be controlled to an extent. The goal for the players remains same which is to deliver the maximum customer productivity with minimum downtime and maintenance. The impact cannot be eradicated quickly, but will prepare people to say with it with no much impact on their lives.

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