In May this year, the purchasing managers index (PMI) for the Chinese steel sector was at 49.2 percent, 1.3 percentage points lower than that recorded in April, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
Moreover, in May, the new order index stood at 46.8 percent, 2.4 percentage points lower than in April.
In May, the new export order index stood at 48.6 percent, 2.1 percentage points higher than in April. Demand for steel from some emerging markets improved in the given month.
In May, the production index for the Chinese steel sector stood at 48.7 percent, remaining stable compared to April.
In May, the finished steel inventory index stood at 43 percent, up 0.7 percentage points from April.
In May, the raw material inventory index declined to 46.0 percent, down 4.0 percentage points from April, signaling that consumption of raw materials was faster than inventory replenishment.
Meanwhile, in May, the raw material purchase volume index stood at 48 percent, 1.6 percentage points higher than April, but still below 50 percent.
As for June, demand for steel will slow down amid the traditional offseason due to the rainy season in southern China and high temperatures in northern China. Construction activities will be negatively affected by the weather, which will curb the demand for steel. At the same time, raw material prices may fluctuate within a limited range at current high levels, which will weaken steelmakers’ willingness to produce steel.
