The COVID-19 pandemic and its disruption to industrial production has begun to impact metals production, especially steel. This comes on the heels of a difficult period for the industry in 2019, when it struggled with tariffs and experienced early signs of a demand slowdown. Now, the industry is in a day-to-day mode of monitoring and forecasting the demand for products from end-users, including the automotive sector, oil and gas industries, and others, such as white-goods (large home appliances) manufacturers.
As this crisis plays out, metals manufacturers will need to improve forecasting related to the potential for slackening demand among downstream steel consumers — especially industries that may be classified as “non-essential.” For instance, the automotive industry, a major consumer of U.S. steel, may already be slowing down production in numerous plants.
The engineering and construction industry may experience its own slowdown — with some construction sites locked down — which could also contribute to reduced demand for steel products. Additionally, aluminum producers and makers of specialty metals such as titanium should look closely at the aerospace and defense industry for possible signs of market demand, both on the upside and downside. However, the operational nature of the metals industry — with long leads required to idle and then restart mills and smelters — presents challenges that require nimble and swift reactions to market dynamics.
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