CHINA’S biggest steel producer, China Baowu Steel Group, expects output to fall 5 percent in the first quarter of 2020 due to coronavirus disruptions, a company official said Saturday.

The steel giant, which churned out 96 million tons of crude steel in 2019, sees its first-quarter output down by 1 million tons from the same period last year, Zhang Jingang, vice general manager of the group, told an industry news conference held by the China Iron and Steel Industry Association (CISA).

Baowu said its steel units are mostly operating normally, including Wuhan Iron and Steel Co., which needs to provide oxygen to local hospitals and guarantee household utilities. Wuhan, in central China, is the epicenter of the outbreak that has caused widespread economic disruptions.

But Baowu still expects profits for the first quarter to drop from year earlier by 2 billion yuan to 3 billion yuan (US$285-US$427 million), according to Zhang.

“As affected by Lunar New Year holidays and the epidemic, market demand is dampened... inventories are piling up faster than expected,” said Zhang, adding that logistical difficulties were affecting production and shipments. (SD-Agencies)