No significant impact yet from coronavirus on metals output: Eramet

London — Eramet's mining and metallurgical production units "have not been significantly impacted to date" by the coronavirus pandemic, but "the situation could change rapidly," the French nickel, manganese and specialty metals producer said Monday.

"First-quarter order intakes are still at a normal level, particularly in Asia, which accounts for more than half of the [mining and metals] division's sales," Eramet said in a statement, adding: "As it stands, the division's mines and metallurgical plants are in a position to provide the volume ordered."

Eramet mines nickel and produces ferronickel at its SLN unit in New Caledonia, as well as very high purity nickel metal, very high purity nickel chloride, very high purity nickel carbonate, liquid cobalt chloride and liquid iron chloride from nickel matte at Sandouville in France.

The company's Comilog unit in Gabon mines manganese ore and produces silicomanganese and manganese metal at its Moanda metallurgical complex; the company also produces manganese alloys at seven plants in China, Europe and the US.

In 2019, Eramet produced 4.765 million mt of manganese ore and sinter, 740,000 mt of manganese alloys, 4.655 wet mt of nickel ore, 47,400 mt of ferronickel and 6,900 mt of nickel salts and high-purity nickel metal

In February, the company announced 2020 targets of more than 5 million mt of manganese ore output in Gabon and exports of 2.5 million wet mt of nickel ore from SLN.

"Considering the uncertainty surrounding the length of the pandemic as well as its scale and impact on the group's supplies and markets, Eramet is currently not in a position to accurately measure its impact on production and performance targets for 2020," the company said.

As a result, it has decided to suspend guidance for 2020 production until there is more visibility on the impact of the pandemic.

On the demand side, "as regards the mining and metals division, in a fast-changing environment, it is still too soon to assess the pandemic's overall impact in the quarters ahead," Eramet said.

"There is still considerable uncertainty about how the pandemic will affect the outlook for end-markets, notably the carbon steel and the stainless steel industries and the entire value chain," the company added.

While some countries, including South Africa and India, have temporarily suspended their mining and metallurgy activities "parallel to this, business activity is gradually resuming in China, the main global consumer of manganese, nickel and raw materials overall," the company said.

But, it added, "Chinese producers have built up large carbon and stainless steel inventories that are likely to weigh on demand for raw materials eventually."

In Europe, "steel industry players have announced a number of slowdowns and temporary suspensions in production, especially impacting products in the automotive sector," Eramet said.