In July this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province increased to 47.9 percent, up 3.5 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 in Hebei Province differed from that for the whole of China, which declined by 2.0 percentage points month on month to 43.1 percent, as announced by the China Steel Logistics Committee (CSLC).
In July, the overall new order index for Hebei Province’s steel sector stood at 48.5 percent, up 13.7 percentage points compared to the previous month. Due to the traditional off-season in China amid high temperatures and floods in some regions, downstream users’ demand was slack, while traders were seeking to build up stocks following rises in steel prices.
In the given month, the production index for Hebei Province’s steel sector was at 46.3 percent, down 2.2 percentage points month on month. The production restrictions in the given month exerted a negative impact on steel production.
At the same time, the inventory index for finished steel in Hebei Province decreased to 48.9 percent, down 7.9 percentage points month on month.
In addition, the raw material inventory index for the steel sector in Hebei decreased to 41.3 percent, down 6.5 percentage points month on month.
As for August, demand will likely increase as the hot weather gradually comes to an end, according to the MIA. The cancellation of the export tax rebate for CRC and HDG will negatively affect steel exports in the short term, while the improvement in overseas economic developments and the price advantage will still bolster exports. It is thought that steel prices may indicate a rebounding trend in August.