In June this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province decreased to 44.4 percent, down 5.2 percentage points month on month, as announced by the Hebei Province Metallurgical Industry Association (MIA). I
In the given month, the trend of the steel sector in Hebei Province was the same as that for the whole of China, which declined by 1.0 percentage point month on month to 45.1 percent, as announced by the China Steel Logistics Committee (CSLC).
In June, the overall new order index for Hebei Province’s steel sector stood at 34.8 percent, down 16.6 percentage points compared to the previous month. Due to the traditional offseason in China, downstream users only purchased as needed, resulting in low transaction activities.
The new export order index stood at 44.9 percent, down 4.3 percentage points amid the implementation of a new export tax policy.
In the given month, the production index for Hebei Province’s steel sector was at 48.5 percent, down 1.4 percentage points month on month. The production restrictions in the given month were implemented strictly due to the 100th anniversary of the founding of the Communist Party of China.
At the same time, the inventory index for finished steel in Hebei Province increased to 56.8 percent, up 9.1 percentage points month on month. Demand for steel slackened in the offseason.
In addition, the raw material inventory index for the steel sector in Hebei increased to 47.8 percent, up 5.6 percentage points month on month. Steelmakers’ shrinking profitability made them unwilling to purchase raw material.
The raw material purchasing index in Hebei Province increased to 52.2 percent, up 2.0 percentage points month on month.
Chi Guiyou, executive chairman of the Hebei Province Metallurgical Industry Association, said the fluctuation in steel prices will affect costs in downstream industries. He urged steelmakers in Hebei Province to reduce the exports of low-value and low-cost products, and to work together with upstream and downstream industries to play a key role in economic development.