In July this year, the purchasing managers index (PMI) for the Chinese steel sector was at 50.5 percent, 4.6 percentage points higher than that recorded in June this year, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
Moreover, in July, the new order index stood at 51.9 percent, 6.3 percentage points higher than in June, back in the expansion zone after two months, hitting a new high over the past nine months.
In July, the production index for the Chinese steel sector stood at 51.9 percent, 8.4 percentage points higher than in June, creating a new high in nearly 9 months.
In July, the finished steel inventory index stood at 46.0 percent, 0.8 percentage points lower than in June.
In July, the raw material purchase volume index stood at 50.7 percent, 0.8 percentage points higher than in June.
As for August, demand for finished steel will improve slowly, while the production might decrease, which will exert a positive impact on steel prices. Meanwhile, prices of raw materials, including coking coal, coke and iron ore may edge up, also bolstering finished steel prices firmly. Moreover, several government departments in China jointly issued a draft revision of the Implementation Regulations of the Price Law for public comment, signaling the entry of a new round of supply-side structural reforms into a new phase of legalization and standardization, which provided solid support to market sentiments. It is expected that finished steel prices will edge up in August.