Amid the deepening coronavirus crisis across the world, global steel giant ArcelorMittal has expressed apprehensions of its sales and profitability getting impacted in 2020 in case the virus spreads widely through Europe, particularly in Italy.

The Luxembourg-based company is the world’s largest steel producer with operations in 18 countries in four continents, including 46 integrated and mini-mill steel-making facilities. It recently completed the acquisition of debt-ridden Essar Steel in India for about Rs 42,000 crore and has announced plans to ramp up its finished steel producing capacity in India to 8.5 million tonnes per annum by the end of 2024.

“The recent increase in cases outside China is worrying and increases the risk of a global pandemic and a much larger negative impact on global GDP. The company is monitoring the situation closely, particularly in Italy, as should the virus spread more widely through Europe this will likely have a material impact on the company’s sales and profitability in 2020,” the steel behemoth said in its latest annual report.

In Italy, the epicentre of Europe’s outbreak, the death toll has climbed to more than 230, and its confirmed cases to 5,800, third behind South Korea and China, where the virus was first detected in December. The company said the epidemic may affect ArcelorMittal’s operations in certain regions and cited examples of how its projects were impacted in Liberia in 2014 and 2015 during the Ebola virus disease epidemic.

“There can be no assurance that other epidemics, including the recent outbreak of the coronavirus in China, will not adversely affect ArcelorMittal’s ongoing operations, production targets and expansion plans, if any, in other markets in which it operates,” the company said.

ADB has predicted global losses because of the coronavirus outbreak at about $156 billion, of which China may account for $103 billion.

ArcelorMittal said it expected Chinese steel demand to grow in 2020 within a “range of +0.0 per cent to +1.0 per cent (versus an estimated growth of +3.2 per cent in 2019), driven by robust real estate activity and given the company’s current view on the coronavirus. This may be revised downwards due to the impact of coronavirus on Chinese demand and the knock-on impact elsewhere.”

It said the precise impact of coronavirus is unknown but it has had a negative impact on Chinese prices and spreads, and the situation could continue if inventories keep rising at mills in China, putting downward pressure on pricing. The company expects a significant negative impact on industrial output and steel demand during the first quarter of 2020 and added that both GDP and steel demand growth are likely to be weaker than earlier estimates.