In July this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province increased to 51.8 percent, up 0.3 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 was not in line with that for the whole of China, which decreased by 0.1 percentage point month on month to 49.2 percent.
In July, the overall new order index for Hebei Province’s steel sector stood at 51.8 percent, down 1.1 percentage points compared to the previous month. In the given month, demand for construction steel (rebar, wire rod) from downstream users slackened further amid rainy weather, floods and high temperatures, though the economic development of China has been healthy.
The new export order index stood at 32.1 percent, down 8.7 percentage points amid the complicated global situation negatively affected by the Covid-19 pandemic, which increased the difficulties facing steel exports.
In the given month, the production index for Hebei Province’s steel sector was at 54.0 percent, up 0.5 percentage points month on month.
At the same time, the inventory index for finished steel in Hebei Province rose to 50.0 percent, up 1.6 percentage points month on month. The slack demand in the traditional offseason and increasing supply of finished steel contributed to the rises of inventory in the given month.
In addition, the raw material inventory index for the steel sector in Hebei rose to 48.0 percent, up 2.4 percentage points month on month, while the raw material purchasing index rose by 1.0 percentage point to 67 percent in July. The high prices of raw materials bolstered steel prices.
Wang Dayong, vice president and secretary general of the Hebei Province Metallurgical Industry Association, said that rising raw material prices will likely provide support for steel prices in the coming month.