In March this year, the purchasing managers index (PMI) for the Chinese steel sector was at 47.9 percent, down 0.7 percentage points as compared to February, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP). In March, steel production decreased due to production restrictions, which also dragged down iron ore prices.
In March, the production index for the Chinese steel sector declined by 3.4 percentage points compared to the previous month to 51.3 percent.
Meanwhile, in March the sub-index for new orders in the steel sector saw a rise of 3.8 percentage points month on month to 47.1 percent. Moreover, the new export orders index indicated a drop of 17.7 percentage points month on month to 43.7 percent amid market players’ worries about the anticipated export tax rebate cut.
In the given month, the finished steel inventory index decreased to 33.2 percent, down 4.9 percentage points month on month amid better demand from downstream users.
At the same time, the purchase price index of raw materials in the Chinese steel sector decreased by 7.4 percentage points month on month to 56.3 percent due to the decreasing prices of iron ore and coke.
As for April, the demand for steel will be better, while production will not indicate significant rises. It is thought that in April steel prices in China will move at high levels, while iron ore prices may fluctuate within a limited range.