Chinese steel sector PMI increases to 46.8 percent in May

Monday, 03 June 2013 16:09:28 (GMT+3)   |   Shanghai
       

 In May this year, the purchasing managers' index (PMI) of China's steel sector increased to 46.8 percent, up 1.7 percentage points compared to the previous month, as announced by the China Steel Logistics Committee (CSLC) which is part of the China Federation of Logistics and Purchasing (CFLP).

In May, China's steel sector PMI witnessed a month-on-month increase but still remained below the 50 percent mark which separates contraction from expansion.
In May, the new order index for China's steel sector increased by two percentage points month on month to 45.2 percent, following month-on-month declines in the previous two months. Meanwhile, in the given month the production index for China's steel sector increased by 4.1 percentage points to 49.0 percent. The raw material inventory index and the purchase volume index also halted their downtrends and indicated increases, pointing to relatively vigorous purchasing and production activities.

The recovery of downstream demand may be negatively impacted by the traditional slow season amid the arrival of hot and rainy weather. Due to the high output capacity of Chinese steel mills, finished steel inventory in China remains at high levels due to overcapacity and decreases in raw material prices and is unlikely to decline but may witness increases instead.

The slight increase in market demand is insufficient to push up finished steel prices in the absence of reductions in production.


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