In June this year, the purchasing managers index (PMI) for the Chinese steel sector was at 36.2 percent, down 4.6 percentage points 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 stood at 34.1 percent, 8.6 percentage points lower than the level recorded in May amid slackening demand and shrinking profitability.
The new order index stood at 25.9 percent, down 6.5 percentage points compared to May, signaling the sluggish demand from downstream users.
The expected index of production and business activity in June stood at 45.2 percent, down 2.2 percentage points compared to May, falling to the lowest level since the beginning of 2022, signaling steelmakers’ lack of confidence towards the prospects for the steel industry in July.
July will be the traditional offseason for the steel industry, which will exert a negative impact on the demand for steel. At the same time, the Covid-19 pandemic may continue to negatively affect transportation and logistics in the steel market. Moreover, some enterprises may experience financial tightness following the Covid-19 pandemic as they have suffered from a crisis in their business over the past few months. It is thought that demand for steel will be slack and that steel prices may edge down in July, while this situation may come to a turning point in September with demand gradually improving by then.