In March this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province increased to 44.3 percent, up 6.2 percentage points month on month, as announced by the Hebei Province Metallugical Industry Association (MIA). In the given month, the trend of the steel sector PMI in Hebei Province was in line with that for the whole of China, which increased by 5.6 percentage points month on month to 42.2 percent.
In March, the overall new order index for Hebei Province’s steel sector stood at 41.7 percent, up 11.3 percentage points compared to the previous month. In the given month, demand for steel from downstream users improved as the main steel consuming industries speed up the resumption of production amid the prevention and control of the coronavirus in the local market.
The new export order index stood at 34.8 percent, down 3.4 percentage points against the backdrop of the rapid spread of the coronavirus worldwide.
In the given month, the production index for Hebei Province’s steel sector was at 42.2 percent, up 3.9 percentage points month on month. Though steel enterprises which implemented maintenance works previously resumed their production, the production in Hebei Province only recorded a limited rise due to environmental protection measures.
At the same time, the inventory index for finished steel in Hebei Province decreased to 42.8 percent, down 19.6 percentage points month on month. In March this year, the better demand and improved transportation conditions contributed to the decreases in inventory levels of steel.
In addition, the raw material inventory index for the steel sector in Hebei rose to 40.5 percent, up 12.3 percentage points month on month. Steelmakers built up some stocks of raw materials amid the improvement in transportation and rising production.
Wang Dayong, vice president and secretary general of the Hebei Province Metallurgical Industry Association, said that, with the lifting of the quarantine ban in Hubei Province, the resumption of production of downstream industries will improve further, especially with more local government bonds being issued to speed up new infrastructure construction. However, inventories are still at relatively high levels, which will exert a negative impact on steel prices. He said it is expected that finished steel prices in the Chinese domestic market will fluctuate within a limited range in April.