In October this year, the purchasing managers index (PMI) for the Chinese steel sector was at 45.6 percent, 0.2 percentage points lower compared to September this year, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
Moreover, in October, the new order index stood at 45 percent, 0.5 percentage points higher than that recorded in September, indicating a certain improvement, while still below 50 percent and not as good as market players had expected.
In the given month, the production index for the Chinese steel sector stood at 43.4 percent, 1.6 percentage points lower than in September, seeing a month-on-month decline for the third consecutive month.
In October, the index of raw material purchase prices stood at 59.3 percent, 14 percentage points lower than in September, with steel enterprises’ production costs at relatively high levels.
As for November, demand for steel may improve to a certain degree as China will issue additional special bonds worth RMB 1 trillion for 2023 in the October-December period this year. At the same time, construction sites will speed up construction activities, which will exert a positive impact on the demand for steel and will bolster steel prices. However, the weather will be colder in late November, which will weaken the demand for steel.
