China’s steel sector PMI falls in Oct amid slacker demand, output restrictions

Monday, 01 November 2021 13:50:53 (GMT+3)   |   Shanghai
       

In October this year, the purchasing managers index (PMI) for the Chinese steel sector was at 38.3 percent, down 6.7 percentage points compared to September, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).

In October, the production index for the Chinese steel sector stood at 36.8 percent, 9.2 percentage points lower than in September, declining for the fourth consecutive month.

Meanwhile, in October the sub-index for new orders in the steel sector saw a big decrease of 10.8 percentage points month on month to 28.2 percent.

Moreover, the new export orders index indicated a drop of 0.8 percentage points month on month to 38.7 percent, remaining below 40 percent for the fourth consecutive month.

At the same time, the purchase price index of raw materials in the Chinese steel sector rose by 8.4 percentage points month on month to 60 percent amid increasing raw material prices due to production restrictions and supply shortages.

As for November, steel prices may increase first due to production restrictions, which will limit supply and bolster prices, while they may move down later as the weather gets colder, which will result in tighter production restrictions, especially in northern China. At the same time, China aims to ensure that its crude steel output will not indicate a year-on-year rise, which will reduce demand for steel and exert a negative impact on steel prices.

$1 = RMB 6.4192


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