In August this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province decreased to 47.9 percent, down 3.7 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 4.7 percentage points month on month to 45.2 percent as announced by the China Steel Logistics Committee (CSLC).
In August, the overall new order index for Hebei Province’s steel sector stood at 50 percent, down 12.5 percentage points compared to the previous month. Bearish sentiments exerted a negative impact on purchasing activities.
In the given month, the production index for Hebei Province’s steel sector was at 45.2 percent, up 1.1 percentage points month on month, still at a relatively high level, though production restrictions are expected to be implemented in the future.
At the same time, the inventory index for finished steel in Hebei Province rose to 39 percent, up 2.7 percentage points month on month. The increasing outputs and decreasing new orders contributed to the rises in inventory levels.
As for September, market players think that, if production restrictions are implemented earlier, this will positively affect steel prices, in addition to the stimulus policies recently announced by China.