Posted on 06 Sep 2022
The Purchasing Managers' Index (PMI) for the steel industry in North China's Hebei province, the country's top steel production base, reversed up to reach 54.2 in August after the decrease over the prior four months, leaping by 17.2 basis points on month, according to the latest release by Hebei Metallurgical Industry Association on its website.
It was the first time for the reading to recover to the expansion zone since May 2021, Mysteel Global noted.
Last month, Hebei's steel PMI was also 8.1 basis points higher compared with that for the national steel PMI, which also grew by 13.1 basis points on month to 46.1 in August.
The sub-index for new orders among Hebei's steel mills posted a substantial on-month growth of 22.1 basis points to record 58.1 for August, according to the release. Steel demand recovered further with the implementation of government measures such as the landing of special debt, and stimulus policies for the auto and white goods sectors, which boosted downstream users' enthusiasm for purchasing.
Last month, the sub-index for new export orders resumed rising after the decrease over the prior month, jumping by 18.2 basis points on month to 50, as steel prices in China bottomed out in July and gave a boost to export business, the association noted.
The sub-index for Hebei's steel production also witnessed a large rise in August, soaring by 29.1 basis points on month to 57 thanks to the improvement in mills' profit margins. This encouraged domestic steel producers, including blast-furnace and electric-arc-furnace mills, to resume operations.
The significant recovery in steel output, coupled with the relatively slow digestion of finished steel, led steel stocks held by steelmakers in Hebei to accumulate sharply last month, with the sub-index jumping by 21.4 basis points on month to 57.1, according to the release.
The sub-index for raw materials stocks held by these steelmakers also surged by 29.5 basis points on month to 56.8 in August, as local steel mills' consumption of steelmaking raw materials increased somewhat with their improved capacity utilization rates, the release showed.
Source:Mysteel Global
