China’s steel sector PMI down slightly in July, demand recovery expected for August

Friday, 31 July 2020 10:03:40 (GMT+3)   |   Shanghai

In July this year, the purchasing managers index (PMI) for the Chinese steel sector was at 49.2 percent, down 0.1 percentage points as compared to June, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP). In July, the steel production increase slowed down, while demand from downstream users was still affected by rains and floods.

In July, the production index for the Chinese steel sector decreased by 3.0 percentage points compared to the previous month to 54.5 percent.

Meanwhile, in July the sub-index for new orders in the steel sector saw a rise of 1.3 percentage points month on month to 47.7 percent, being still below 50 percent point amid rains and floods in China. However, the new export orders index indicated a rise of 11.6 percentage points month on month to 42.8 percent, finally above 40 percent following lower than 40 percent for four consecutive months. 

In the given month, the finished steel inventory index declined to 40.2 percent, down 4.1 percentage points month on month.

At the same time, the purchase price index of raw materials in the Chinese steel sector continued to stand at high level, even indicating a drop of 1.6 percentage points month on month, to 65.8 percent. In July, the production of steel indicated a slowing-down growth, while demand for steel was weak, and raw material prices were high.

As for August, CSLC forecasted that steel production will increase, while demand will improve amid the closure of rainy weather, which will result in rising steel prices. 

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