In January this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province decreased to 47.7 percent, down 0.5 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 PMI in Hebei Province contrasted with that for the whole of China, which increased by 4.0 percentage points month on month to 47.1 percent.
In January, the overall new order index for Hebei Province’s steel sector stood at 44.6 percent, down 1.2 percentage points compared to the previous month. In the given month, demand for steel from downstream users slackened due to the Chinese New Year holiday.
In the given month, the production index for Hebei Province’s steel sector was at 48.5 percent, up 0.3 percentage points month on month.
At the same time, the inventory index for finished steel in Hebei Province increased to 52.5 percent, up 8.5 percentage points month on month. In January this year, steel traders built up stocks, resulting in increased inventories.
In addition, the raw material inventory index for the steel sector in Hebei increased to 50.5 percent, down 0.3 percentage points month on month.
The Hebei Province Metallurgical Industry Association said that downstream users in China will extend their holiday at least to February 9 due to the outbreak of the coronavirus, which will exert a negative impact on demand for steel in February, though steel demand will likely recover in March, according to current expectations. Finished steel prices in China are expected to edge down in February.