In May this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province decreased to 49.6 percent, down 4.0 percentage points month on month, as announced by the Hebei Province Metallurgical Industry Association (MIA).
In the given month, the trend of the steel sector in Hebei Province was different from that for the whole of China, which rose by 0.7 percentage points month on month to 46.1 percent, as announced by the China Steel Logistics Committee (CSLC).
In May, the overall new order index for Hebei Province’s steel sector stood at 51.4 percent, down 10.7 percentage points compared to the previous month. Steel prices indicated big changes in the given month, with supply and demand playing the key role in impacting prices.
The new export order index stood at 49.2 percent, down 0.7 percentage points amid the cancellation of the export tax rebate.
In the given month, the production index for Hebei Province’s steel sector was at 49.9 percent, up 0.4 percentage points month on month. The production restrictions continued in Tangshan and slowed down output, but good profits prevented production from recording big decreases.
At the same time, the inventory index for finished steel in Hebei Province increased to 47.7 percent, up 7.0 percentage points month on month. The big changes in steel prices negatively affected downstream users’ purchases.
In addition, the raw material inventory index for the steel sector in Hebei decreased to 42.2 percent, down 4.3 percentage points month on month. The sharp rises and declines in steel prices resulted in big changes in raw material prices, and so steelmakers purchased just in line with their needs, contributing to the declines in inventory.
The raw material purchasing index in Hebei Province decreased to 50.2 percent, down 1.3 percentage points month on month.
Chi Guiyou, executive chairman of the Hebei Province Metallurgical Industry Association, said the sharp rises and drops in prices have exerted a negative impact on the steel industry. He urged steelmakers in Hebei Province to bear the cost pressure together with the upstream and downstream industry chain, and to play the role of providing ballast for economic development.