In October this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province decreased to 45.1 percent, down 2.2 percentage points month on month, as announced by the Hebei Province Metallurgical Industry Association (MIA). In the given month, the trend of the PMI for the steel sector in Hebei Province was in line with that for the whole of China, which decreased by 0.2 percentage points month on month to 45.6 percent, as announced by the China Steel Logistics Committee (CSLC).
In October, the overall new order index for Hebei Province’s steel sector stood at 42.5 percent, up 2.8 percentage points compared to the previous month. China’s issuance of additional special bonds worth RMB 1 trillion for 2023 in the October-December period bolstered market sentiments.
In the given month, the new export order index for Hebei Province’s steel sector was at 40.9 percent, down 6.8 percentage points month on month. The turbulence in the global market exerted a negative impact on steel exports.
In the given month, the production index for Hebei Province’s steel sector was at 38.1 percent, down 10.7 percentage points month on month. Steelmakers’ losses expanded, resulting in more steel enterprises implementing maintenance works and reducing outputs.
At the same time, the inventory index for finished steel in Hebei Province rose to 57.3 percent, up 12.2 percentage points month on month. The demand for steel has not improved, while downstream users have preferred to maintain low inventory levels.
In October, the inventory index for raw materials in Hebei Province stood at 48.8 percent, down 9.5 percentage points month on month. Steelmakers were incurring losses and so they were unwilling to build up stocks of raw materials.
As for November, Chi Guiyou, executive president and secretary general of the MIA, stated that China’s stimulus policies have positively affected market sentiments, while he urged steelmakers not to increase outputs, in order to bolster steel prices from the supply side.