In June this year, the purchasing managers index (PMI) for the Chinese steel sector was at 45.1 percent, down 1.0 percentage point as compared to May, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
In June, the production index for the Chinese steel sector declined by 0.7 percentage points compared to the previous month to 50.7 percent.
Meanwhile, in June the sub-index for new orders in the steel sector saw a drop of 4.6 percentage points month on month to 34.8 percent. Moreover, the new export orders index indicated a decline of 1.6 percentage points month on month to 42.3 percent.
As a result of the weakening of demand, in the given month the finished steel inventory index increased to 47.1 percent, up 3.7 percentage points month on month.
At the same time, the purchase price index of raw materials in the Chinese steel sector declined by 10.2 percentage points month on month to 52.9 percent amid decreasing raw material prices.
As for July, steel prices are unlikely to indicate rises as the high temperatures and rainy weather will curb demand for steel and the supply shortage of chips in the vehicle industry may negatively affect the production of vehicles and weaken the demand for auto steel, though raw material prices may indicate some increases.
$1 = RMB 6.4601