Europe’s manufacturing Purchasing Managers Indexes (PMIs) for March released today indicate a potentially disastrous outlook for metals demand as the coronavirus pandemic decimates industries across the continent.

The IHS Markit headline PMI for the eurozone fell sharply to 44.5, from 49.2 in February. Any number below 50 indicates a contraction in purchasing activity and a number above 50 indicates an expansion. Many countries in Europe introduced lockdown measures late in March, meaning there were weeks where manufacturing was normal. April is expected to be dramatically worse as the crisis is supposed to peak.

Germany’s PMI score fell to 45.4, from 48 in February. Germany has one of the highest numbers of virus cases in Europe, but has a low death rate and looser lockdown measures than other countries.

“Manufacturing production in Germany took a considerable hit in March, falling to the greatest extent for nearly 11 years,” said Phil Smith, principal economist at IHS Markit. “Furthermore, there’s scope for the numbers to get even worse before they get better, as most containment measures and factory shutdowns happened either during or after the survey data were collected [on 12-24 March],” Smith said.

Some steel mills in Germany are still operational and traders said they were still delivering material on long-term contracts for ferro-alloys and other steel alloying elements. Germany also benefits from having large ports in Duisberg and Hamburg, meaning material does not need to cross borders into the country, many of which have closed or introduced checks within the EU.

Italy, Europe’s worst impacted country so far, recorded the fastest-ever fall in output and its PMI score declined to 40.3 from 48.7 in February. For the past two weeks, most traders have found it difficult to find trucks to send material to Italy. Steel mills and foundries in the country started closing two weeks ago and were fully shut down last week when the government increased lockdown measures.

Northern Italy, the region most affected by the outbreak, is important to automotive supply chains in Europe. Several aluminium alloy producers in the region have closed, reducing demand for silicon metal and magnesium from suppliers in other parts of Europe. Several steel mills also closed and traders said deliveries of ferro-alloys on contracts were cancelled.

Spain’s headline PMI number fell to 45.7 and France’s to 43.2. Both countries have introduced strict lockdowns, although Spain has exempted most large power consumers, including metal smelters. But they will still have to reduce output, because of a lack of downstream demand in key markets such as the construction and automotive sectors. Some steel producers, like Sidenor, shut down completely from the start of the lockdown.

“The concern is that we are still some way off peak decline for manufacturing,” said Chris Williamson, chief business economist at IHS Markit, commenting on the eurozone. “Besides the hit to output from many factories simply closing their doors, the coming weeks will likely see both business and consumer spending on goods decline markedly as measures to contain the coronavirus result in dramatically reduced orders at those factories still operating,” Williamson said.

“Large swathes of manufacturing could see downturns of the likes not seen before,” he added.