China’s steel sector PMI down in Aug as demand drops, rebound expected in Sept

Tuesday, 31 August 2021 14:57:07 (GMT+3)   |   Shanghai

In August this year, the purchasing managers index (PMI) for the Chinese steel sector was at 41.8 percent, down 1.3 percentage points as compared to July, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).

In August, the production index for the Chinese steel sector stood at 44 percent, 0.9 percentage points higher than in July, while still at a relatively low level. 

Meanwhile, in August the sub-index for new orders in the steel sector saw a decline of 5.2 percentage points month on month to 31.6 percent. The new export orders index indicated a rise of 1.0 percentage point month on month to 31.8 percent, which means that the decline in export shipments was just slightly slower, but the tendency was still negative, in particularly, due to the cancellation of the export tax rebate on CRC and HDG as of August 1.

At the same time, the purchase price index of raw materials in the Chinese steel sector declined by 8.6 percentage points month on month, to 47.7 percent amid decreasing raw material prices.

As for September, steel prices will likely indicate rises as demand for steel will improve in the traditional peak season. Iron ore prices may bottom up following big declines over the past two months, while coke prices may continue to rise due to short supply, which will bolster steel prices from cost side, as CSLC stated.

$1 = RMB 6.4679

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