In November this year, the purchasing managers index (PMI) for the Chinese steel sector was at 49.3 percent, up 3.5 percentage points as compared to October, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP). In November, steel production increased, while steel and iron ore prices rose sharply.
In November, the production index for the Chinese steel sector increased by 6.2 percentage points compared to the previous month to 53.3 percent due to good demand.
Meanwhile, in November the sub-index for new orders in the steel sector saw a rise of 2.3 percentage points month on month to 47.2 percent. The new export orders index indicated a decline of 6.1 percentage points month on month to 45.9 percent.
In the given month, the finished steel inventory index decreased to 32.2 percent, down 5.1 percentage points month on month amid decent demand.
At the same time, the purchase price index of raw materials in the Chinese steel sector surged by 22.4 percentage points month on month to 69.7 percent amid the improved demand for iron ore due to rising steel prices.
As for December, the real estate industry in China will continue to bolster demand for steel, while demand from the auto industry and the home appliance industry will improve further. At the same time, construction work on key infrastructure projects will speed up towards the end of the year, which will stimulate the demand for steel. However, as the coldest period of the year is approaching, demand for steel will inevitably slacken, which will drag down steel prices in the latter part of December.