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Typhoon Chanthu brings East China steel market to a halt

Posted on 15 September 2021

Tropical Typhoon Chanthu, the 14th to whirl through East Asia this typhoon season, brought torrential rains and strong winds to China’s eastern provinces from Sunday through Tuesday, bringing local steel markets almost to a halt with trading suspended, transportation disrupted and demand stagnated, market sources indicated on Tuesday.

 

At its most ferocious, the strong typhoon was seen generating sudden wind gusts and lightning strikes but by Tuesday morning, Chanthu’s wind speed at its center had abated to around 35 meters/second, prompting China’s National Meteorological Center to downgrade it to a tropical depression.

Although Chanthu did not make a landfall in China, it will continue to bring moderate to heavy rains to East China’s Shanghai, Jiangsu and Zhejiang areas over September 14-15, before veering northeast to Japan, the meteorological center said.

Concerns about public safety and likely damage to property had led Shanghai municipality, home to around 26 million residents, to order schools closed from late Monday, while flights to and from several airports were cancelled and operations on some sections of rail and subway networks suspended, according to public releases from local government authorities. Loading and unloading work at coastal and river ports in Shanghai and Zhejiang was suspended since Monday until further notice.

Steel market sources contacted by Mysteel Global spoke of serious disruptions to their business caused by the typhoon, from upstream raw material transportation to downstream steel trading.

“Steel trading has stagnated,” a steel trader based in Shanghai said bluntly. “The warehouses are closed so steel products cannot be taken from them. Most our clients, the construction contractors, have also stopped work because of the strong wind and torrential rains,” he lamented.

Government officials checking Zhejiang construction sites’ safety status as typhoon approaches

Source: Xinhua News

Mysteel’s survey across 237 steel traders nationwide showed that in Shanghai on Monday when Chanthu was pummelling the city, the trading volume of rebar, wire rod and bar-in-coil was only 732 tonnes/day: the normal daily range is around 10,000 t/d-20,000 t/d.

Nevertheless, the trader believed that the impact of the typhoon on steel trading will be short-lived, predicting that normal activity will probably resume from Wednesday.

On the other hand, the suspension of operations at East China ports has been severely impacting transportation of some raw materials, such as iron ore and thermal coal, according to sources.

“The loading and unloading operations at many ports along the Yangtze River in Jiangsu were suspended from September 13 due to the typhoon. The adverse weather makes it hard for ships to enter the river, so some have turned round and headed to some ports in northern areas largely unaffected by the typhoon,” a Jiangsu-based iron ore trader remarked.

An official with a shipping agency in North China’s Hebei warned that the weather event risked causing freight rates to climb. “The typhoon is sweeping through coastal areas in East China and seriously slowing coal delivery via vessels (from North China) to this region,” he told Mysteel Global.

Coal produced in North China is mainly delivered via vessels to end-users in East and South China, Mysteel Global notes.

However, Chanthu’s impact on coal shipments to East China has been partially cushioned by the fact that some local power stations were already moderately slowing thermal coal replenishment before the typhoon struck, as cooling temperatures had lead power consumption among households and businesses to ease, he added.

Source : Mysteel Global