Beijing, 13 February (Argus) —

Prices for metals and ferro-alloys are expected to hold firm or rise in the coming weeks because of lower Chinese supplies. This is following production cuts and logistics problems caused by the country’s coronavirus outbreak.

Traffic restrictions and quarantine measures imposed by the Chinese government to contain the spread of the coronavirus have forced most metals and alloys plants to shut down or reduce production in the past few weeks.

Although, some smelters have resumed output this week, they are operating at lower than usual run rates because of a lack of workers and tight feedstock costs caused by limited logistics services.

China has put more than 80 cities, including Wuhan, Guangzhou, Shenzhen, Nanjing and Hangzhou under quarantine to limit the inflow and outflow of people. This has delayed millions of workers returning to their factories from their home towns after the lunar new year holiday.

Most smelters are unlikely to resume full run rates until the end of this month or early March because of the shortage of workers and logistics bottlenecks. A potential rise in operating costs at smelters is expected to support prices, as they may have to pay higher wages to recruit new workers or encourage workers to return.

Freight rates have also risen in most regions amid limited logistics services. Providers are struggling to raise capacity because of traffic restrictions.

The coronavirus has killed more than 1,300 and infected nearly 60,000 people in China as of today, according to government figures. New confirmed sources outside of the epicentre Hubei province are falling, with several Chinese medical experts and scientists forecasting the outbreak will hit a peak in March and come under control in April

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This article was retrieved from Argus Metals