Posted on 06 Jun 2022
The Purchasing Managers' Index for the steel industry in North China's Hebei province, the country's top steel production base, contracted further during May to 43.4, down by another 0.6 basis point on month, according to the latest release by the Hebei Metallurgical Industry Association on its website.
Hebei's May result was still 2.5 basis points higher than that for the national steel PMI, which recovered slightly by 0.4 basis point on month after sliding for three months, Mysteel Global noted.
Last month, the sub-index for new orders among Hebei's steel mills continued to decline to 38.6, falling by another 4.6 basis points from April, as transport disruptions related to the COVID-19 resurgence in the Beijing-Tianjin-Hebei region led steel demand from downstream users to decrease, the association noted.
The sub-index for new export orders dropped further in May, falling by another 13.7 basis points on month to 31.8, as some overseas buyers preferred to import from Southeast Asia or the Middle East regions, given the competitive prices there, according to the release.
For May, the sub-index for Hebei's steel production kept stable at 45.5, as capacity utilization among local steel mills stayed high on support of local authorities' measures to boost economic growth. Also, though the province's makers were on the verge of losing money, they're under less pressure to curb production this year, the association pointed out.
The sub-index for finished steel stocks at Hebei's mills climbed again in May, rising by another 2.3 basis points on month to 70.5, mainly due to the steady output against thinner demand.
However, the sub-index for raw materials stocks held by Hebei steelmakers reversed up last month after decreasing during the prior two months, gaining 2.3 basis points on month to 27.3, the release showed. Local steel mills reinforced their stocks of steelmaking raw materials on expectations of a recovery in demand in the coming term, thanks to the success the country had had in the battle against the pandemic, it said.
Source:Mysteel Global
