In October this year, the purchasing managers' index (PMI) of the steel sector in China's Hebei Province decreased to 43.7 percent, down 4.3 percentage points month on month, remaining below the threshold of 50 percent, as announced by the Hebei Province Metallurgical Industry Association (MIA).
In October, the overall new order index for Hebei Province's steel sector decreased to 34.2 percent, down 10.9 percentage points compared to the previous month.
In October, the production index for Hebei Province's steel sector declined by 2.5 percentage points month on month to 46.3 percent, while the new export order index for Hebei Province's steel sector remained stable month on month at 54.8 percent. As the domestic-international price differential narrows and export margins thin out, steel exporters have transitioned from scrambling for orders to taking orders based on demand.
At the same time, in October, the inventory index for finished steel in Hebei Province remained stable month on month at 50.0 percent.
The ex-works price index for finished steel stood at 25.6 percent in October, decreasing by 20.7 percentage points month on month.
In October, the inventory index for raw materials in Hebei Province stood at 43.9 percent, up 3.7 percentage points month on month.
In October, the purchasing price index for raw materials stood at 35.4 percent, down 25.6 percentage points from September this year.
During the given month, coking coal and iron ore prices trended downward, pulling down steelmakers' production costs and weakening the support for steel prices. Coupled with weak demand, steel prices struggled to sustain a rebound, leaving the overall market in a state of weak supply-demand equilibrium.
However, steel prices are expected to soften in November amid slack demand in the traditional off-season.
