In January this year, the purchasing managers’ index (PMI) of China’s steel sector declined to 49.3 percent, down 6.2 percentage points compared to the previous month, as announced by the China Steel Logistics Committee (CSLC) which is part of the China Federation of Logistics and Purchasing (CFLP).
In January, the new order index for China’s steel sector decreased by 10.6 percentage points month on month to 49.4 percent. Meanwhile, in January the production index for China’s steel sector decreased by 10.3 percentage points month on month to 49.1 percent. The input price index for China’s steel sector in January was 74.1 percent up 5.2 percentage points month on month, while the finished steel inventory index saw a month-to-month drop of 6.6 percentage points to 45.9 percent.
Market insiders currently state that demand in the Chinese domestic steel industry is fairly sluggish, resulting in a strong imbalance between supply and demand. It is thought that steel prices in the Chinese domestic market may move sideways in the period immediately after the Spring Festival/Chinese New Year holiday. However, in March steel prices in the Chinese market may move up on the back of recovering demand and with the support of macroeconomic factors.