Concern builds in US industry over coronavirus

Concern in the US steel industry concerning the coronavirus appears to be growing.

Late Wednesday, US President Donald Trump issued a travel ban for the bulk of Europe against a backdrop of the World Health Organization declaring the coronavirus an official pandemic. 

Several mill and service centre sources tell Kallanish that their companies have instituted internal travel bans, limiting physical exposure to both conferences and customers. 

While the immediate effects on the supply chain have not yet been felt, it’s virtually impossible that the US remains unaffected, sources say. 

“It is feasible that supply chains are disrupted from shutdowns [both] global and domestic,” says a Midwest service centre source. 

A source at one top-tier mill says it is hard to tell exactly how the industry will react to bottlenecks or shortages. 

“I could argue it could be a boon for the domestic steel industry, and I could argue it could disrupt certain parts of the supply chain and be a bust for the domestic steel industry,” he says, noting that imports are likely to be disrupted due to production issues in the exporting countries. 

A Gulf Coast trader predicts that the oilpatch will be heavily affected by bankruptcies as a result of the virus and falling oil prices, leading ultimately to credit shortages. 

“Accelerated devaluation of assets will cause many companies to fall in default of bank covenants,” he says. “That means no access to money. They can’t pay you, you can’t pay me, which means I can’t pay who I owe.”