The 2019-nCoV - or Wuhan novel coronavirus - has infected several thousand people across more than a dozen countries and has forced China to lock down several cities during the Chinese New Year holiday, the busiest travel season in the country.

Mounting concerns over the virus’ potential global economic impact has left steel market participants and analysts split on whether the virus will have any meaningful effect on the US steel industry.

When comparing the coronavirus with the 2003 SARS - severe acute respiratory syndrome - outbreak, some participants said the impact of the coronavirus would be “profound,” since China today is very different than it was nearly 20 years ago.

China represented up to 5% of the global gross domestic product in 2003, but that number has risen to roughly 15-20% today, Phil Gibbs, an analyst at KeyBanc Capital Markets, said in a research note dated Tuesday January 28.

Chinese oil consumption has also nearly tripled since 2003, Gibbs noted, which has caused oil prices to drop by more than 10% in the past two weeks due to international travel concerns and lockdowns of Chinese cities.

“Very generally, we think there could be some short-term negative implications from the coronavirus for China's demand and production,” William Van Meerbeke, senior analyst on corporate finance at Fitch Ratings, told Fastmarkets.

But oil and steel prices are not “highly correlated,” he added.

In Wuhan, the center of the coronavirus outbreak, there are nine different automotive factories and "countless other major corporations," according to a report by Joshua Toney, a derivatives broker at Freight Investor Sevices, dated January 27.

In general, Chinese steel demand accounted for almost 50% of global steel demand in 2018, according to data from the World Steel Association.

“[The] US doesn’t have a lot of [steel] imports from China, so China steel production isn’t going to have a direct effect [on US markets],” Gordon Johnson, founder of New York-based GLJ Research, said in an interview with Fastmarkets. “But [there is] a lot of steel being imported into China from places [that also import] to the US.”

Indeed, US steel mill product imports from China dropped to 474,225 tonnes in January-November 2019 from an annual total of approximately 1.1 million tonnes in 2011, according to US Commerce Department data.

China, however, was the third-highest importer of US steel products in 2018, according to a database compiled by Commerce.

Among the top steel product exporters to China in 2018, South Korea, Japan, Germany and Taiwan were also among the top 10 foreign steel suppliers to the US.

“[If] China's demand temporarily evaporates, you are going to have a lot of excessive steel globally,” Johnson said. “If the key countries that export to the US see significant falls in other countries... they are going to export more steel to the US.”

Other sources were less concerned with the potential impact and said that if the coronavirus had any effect, it would be very limited.

A flat-rolled steel mill source told Fastmarkets that any fear caused by the coronavirus had not affected his company’s inquiries or sales.

Fastmarkets' daily steel hot-rolled coil index, fob mill US was $29.98 per hundredweight ($599.60 per short ton) on January 29, down by 0.8% from $30.22 per cwt a day earlier but almost unchanged from $30.03 per cwt a week earlier.

For the most part, market participants who spoke to Fastmarkets said it was still too early to estimate the impact of the virus on the US markets.

“I think the Chinese government is doing a great job to quickly contain this situation,” one steel buyer said. “Hopefully, there will be vaccine available soon.”