In April this year, the purchasing managers index (PMI) for the Chinese steel sector was at 45.4 percent, down 2.5 percentage points as compared to March, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
In April, Chinese steel production decreased due to production restrictions and the slowdown in demand from downstream users. At the same time, exports showed visible improvement.
In April, the production index for the Chinese steel sector declined by 4.3 percentage points compared to the previous month to 47.0 percent.
Meanwhile, in April the sub-index for new orders in the steel sector saw a drop of 2.7 percentage points month on month to 44.4 percent, which indicates that demand in China was declining slightly faster than in the previous month.
Nevertheless, new export orders index indicated a rise of 8.0 percentage points month on month to 51.7 percent due to improving demand amid the continuous economic recovery. The index is above the 50 percent mark, showing that export orders are on the rise.
In the given month, the finished steel inventory index increased to 34.4 percent, up 1.2 percentage points month on month, but it is still much lower than the 50 percent mark, indicating a continuous decline in stocks, though at a slower pace than previously.
At the same time, the purchase price index of raw materials in the Chinese steel sector rose by 13.1 percentage points month on month, to 69.4 percent due to the increasing prices in iron ore and coke.
As for May, demand for steel is expected to improve, while production will remain at reduced levels in some areas.
$1 = RMB 6.4895