Posted on 01 Nov 2022
After rising for the two previous months, China's Purchasing Managers' Index (PMI) for its steel industry declined in October, dipping by 2.3 percentage points on month to 44.3, according to the latest release from the official index compiler, CFLP Steel Logistics Professional Committee (CSLPC) on October 31. Steel demand weakened during the month and supply decreased, with domestic steel and raw materials prices softening in tandem, the committee noted.
For November, steel demand may inch down and production may have some room for growth, while domestic steel prices may decline marginally, given the continuing imbalance between supply and demand, the committee observed.
In October, the sub-index of new steel orders including domestic sales and exports declined by 1.9 percentage points after September's rise to reach 43.4, still below the threshold of 50% connoting contraction, according to CSLPC. Although demand had improved in the first ten days of this month, due to steel-consumer replenishment needs and speculative buying, it subsequently declined sharply to reach a low for this year, with the steel market becoming flat after the National Day holiday during October 1-7, the committee noted.
China's steel production sub-index slumped by 9.1 percentage points on month to reach 38.8 in October, mainly due to government-imposed production curbs to improve air quality, CSLPC explained, adding that the enthusiasm for production among steel producers cooled markedly in response to the waning demand.
Daily steel output among the major steel mills under the survey of the China Iron & Steel Association (CISA) averaged 2.79 million tonnes/day over October 11-20, down 1.2% from the prior ten days, the committee said, quoting CISA's data.
The sub-index for steelmaking raw materials prices slid for the second month, with prices softening by another 3 percentage points on month to 39.9 in October. Iron ore prices declined on increased supplies from overseas, at a time when domestic demand was still poor, according to the committee.
Source:Mysteel Global
