In April this year, the purchasing managers index (PMI) for the Chinese steel sector was at 40.5 percent, down 3.8 percentage points compared to March, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
In April, the production index for the Chinese steel sector stood at 38.6 percent, 6.8 percentage points lower than that recorded in March amid the lockdown in Shanghai and strict Covid-19 control measures.
The new order index stood at 33.6 percent in April, down 5.7 percentage compared to March.
At the same time, the raw material inventory index declined by 4.5 percentage points month on month to 38.2 percent.
Meanwhile, the purchase price index of raw materials in the Chinese steel sector increased by 8.2 percentage points month on month, to 73.4 percent. Iron ore prices declined slightly in April amid decreasing output, while prices of other raw materials, including coking coal and coke, moved up amid tight supplies. At the same time, the Covid-19 pandemic exerted a negative impact on transportation, increasing logistics costs and affecting raw material prices.
In April, the steel inventory index was at 41.4 percent, up 10.2 percentage points compared to March, as difficulties in transportation negatively affected the circulation of steel products.
As for May, steelmakers’ production costs will increase and the sales prices of steel products will decline, which will reduce their profitability.