Posted on 01 Jun 2022
China's Purchasing Managers' Index (PMI) for the domestic steel industry scored 40.9 in May, or having reversed up by 0.4 basis point on month from a three-month decline, with COVID-induced impact easing, while demand remained weak, finished steel prices down, steel production recovered, and steel inventories increased, the official index compiler CFLP Steel Logistics Professional Committee (CSLPC) commented in its latest release on May 31.
As for June, "the pandemic impact on Chinese steel industry chain will weaken further, demand may be released at a fast pace, steel output may rise, and prices of both steelmaking raw materials and finished steel may move up," CSLPC predicted.
In May, China's sub-index of new steel orders including domestic sales and exports fell for the third straight month by another 1.2 basis points to 32.4, as the pandemic had not only dampened the industrial chain in the Yangtze River delta region, but also hindered construction activities in many regions across the country.
In addition, investment in Chinese property market continued to underperform and newly-launched property projects decreased further, according to CSLPC.
For China's steel production in May, the sub-index reversed from three months of dips, up 4.1 basis points on month to 42.7, as steel mills' production tended to pick up due to the improved COVID situation and recovered profits of steel products, CSLPC noted.
Daily crude steel output among major steel mills under China Iron & Steel Association's survey grew 2% on month to average 3.16 million tonnes/day during this month. However, the volume was still below the normal level due to slack demand and raw material supply disruptions, CSLPC shared.
In May, the sub-index of the steelmaking raw material procurement prices slumped by a large 37.8 basis points on month to 35.6, mainly due to waning demand for finished steel and central government policies to secure raw material supply and stabilize prices, according to the CSLPC release.
Source:Mysteel Global
