China’s steel sector PMI rises in Oct amid better demand, falling iron ore prices

Monday, 02 November 2020 14:02:29 (GMT+3)   |   Shanghai
       

In October this year, the purchasing managers index (PMI) for the Chinese steel sector was at 45.8 percent, up 1.9 percentage points as 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, steel production in China rose slightly, while iron ore prices decreased.

In October, the production index for the Chinese steel sector increased by 1.1 percentage points compared to the previous month to 47.1 percent due to better demand, though production restriction measures for environmental protection purposes in Tangshan limited the growth of production.

Meanwhile, in October the sub-index for new orders in the steel sector saw a rise of 8.3 percentage points month on month to 44.9 percent. Moreover, the new export orders index indicated a rise of 5.4 percentage points month on month to 52.0 percent.

In the given month, the finished steel inventory index indicated minimal changes and stood at 37.3 percent, up just 0.5 percentage points month on month amid firm demand.

At the same time, the purchase price index of raw materials in the Chinese steel sector decreased by 6.9 percentage points month on month to 47.3 percent amid rising iron ore shipments and iron ore supplies at ports.

As for November, CSLC forecasts that demand will likely be stable, which will support steel prices to some extent, while exports will also remain at quite good levels, though steel production output will likely decrease.


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