Everyone thought a COVID-19-ravaged steel supply market in China took a turn towards recovery. However, many other hurdles now stand in the way, both long and short term.

Power cuts and muted demand driven by the construction crisis in China stand in the path of growth. Even worse, the cascading effect has affected the supply of critical commodities like coking coal and iron ore.

Like India, infrastructure growth plays a major role in China’s consumption of steel. However, because of the post-COVID-19 slowdown and the worsening property crisis, the steel sector has not bounced back the way it was anticipated.

The prognosis looks bad, evident from this statement of Li Ganpo, founder and chairman of Hebei Jingye Steel Group. Ganpo reportedly warned at a private company meeting a few weeks ago that almost a third of China’s steel mills could go bankrupt. This would result in massive steel supply chain disruptions.