In May this year, the purchasing managers index (PMI) for the Chinese steel sector was at 40.9 percent, up 0.4 percentage points compared to April, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
In May, the production index for the Chinese steel sector stood at 42.7 percent, 4.1 percentage points higher than that recorded in April amid the easing of the Covid-19 pandemic.
The new order index stood at 32.4 percent, down 1.2 percentage points compared to April.
Meanwhile, the purchase price index of raw materials in the Chinese steel sector decreased by 37.8 percentage points month on month, to 35.6 percent in May. The decline in raw material prices was faster than the decrease in steel prices, easing production costs on the steelmakers’ side, resulting in better profitability.
In May, the inventory index was at 49.9 percent, up 8.5 percentage points compared to April due to improved production activities.
As for June, the negative impact of the Covid-19 pandemic on the steel industry will ease and so demand for steel will improve, which will likely push up steel prices and raw material prices.