[ferro-alloys.com]Chinese steel mills are expected to deepen steel output cuts in March and lower ex-works prices due to depressed end-user demand and mounting finished steel inventories, market sources said Thursda

Construction and manufacturing activity remains extremely slow in China this week, with less than a third of migrant workers having returned to their employers due to the novel coronavirus, or COVID-19, outbreak, according to S&P Global Platts estimates.

Manufacturing activity has resumed more quickly, but factories are unable to boost capacity utilization rates due to interrupted supply chains.

Only around 27% of migrant workers had returned to their cities of employment after Lunar New Year holidays in the provinces of Guangdong, Jiangsu, Shandong, Zhejiang, Fujian and the municipalities of Shanghai and Chongqing as of February 24, Platts estimates based on passenger data provided by Chinese search engine Baidu.

The migrant workers are also subject to up to 14 days' quarantine after returning.

The construction gross output value and industrial main business income of these provinces and cities account for 46% and 53%, respectively, of China's total.

As migrant workers play a pivotal role in construction and manufacturing in these areas, operating rates at construction sites and factories are likely to be extremely low.

Steel traders said spot transactions for long steel products were currently around 20% of the level in the same period after the 2019 Lunar New Year holidays.

One mill source said demand for long steel in February was down 90% year on year; demand for flat steel down 30%-50% over the same period due to a comparatively faster recovery by manufacturers.

According to China's Ministry of Transport, 39% of railway construction projects had restarted February 24, and 37% of major highway and waterway projects. The restart ratio of airport construction projects was lower at 26%.

(S&P Global Platts)

• [Editor:王可]