In November this year, the purchasing managers index (PMI) for the Chinese steel sector was at 45.4 percent, up 4.1 percentage points as compared to October, ending the declining trend seen since May this year, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP). In November, demand improved, pushing up finished steel and raw material prices.
In November, the production index for the Chinese steel sector increased by 1.1 percentage points compared to the previous month to 43.4 percent. Meanwhile, in November the sub-index for new orders in the steel sector saw a rise of 12.2 percentage points month on month to 43.8 percent. Demand in southern China was better than in northern China due to warmer weather.
In the given month, the finished steel inventory index decreased to 27.1 percent, down 9.7 percentage points month on month, decreasing for the third consecutive month. In particular, inventory of rebar continued to show the biggest decline in November.
At the same time, the purchase price index of raw materials in the Chinese steel sector stood at 46.4 percent, indicating a rise of 12.5 percentage points month on month due to the expanding production activities of steelmakers. The improving demand for raw materials resulted in higher raw material prices.
As for December, demand will likely slacken due to cold weather, also in southern China. At the same time, if production restriction measures continue to be relaxed, oversupply will exert a negative impact on the steel market and lead to a downtrend in steel prices.