Posted on 03 Nov 2022
The Purchasing Managers' Index (PMI) for the steel industry in North China's Hebei province, the country's top steel production base, declined by 5.7 basis points on month to 45 in October, according to the release by Hebei Metallurgical Industry Association on November 1. Notably, the index for October slipped to below the threshold of 50 connoting contraction after just two months of expansion.
Nevertheless, the October result was still 0.7 basis point higher than that for the national steel PMI, which also decreased by 2.3 basis points on month to 44.3, as Mysteel Global reported.
Last month, the sub-index for new orders among Hebei's steel mills continued declining to 41.7, down by a large 11.9 basis points from September, chiefly due to sluggish mood and dull downstream demand. Steel transactions in the traditional peak season were less than expected as most buyers chose to purchase only for their immediate production needs.
The sub-index for new export orders eased further too, losing another 5.1 basis points on month to 38.1, mainly owing to weakened steel prices globally.
Moreover, the sub-index for Hebei's steel production also witnessed a decrease in October, down by 7 basis points on month to 47.7 as both blast-furnace and electric-arc-furnace mills had trimmed their production in response to thinner profit margins or even losses.
On the other hand, finished steel stocks held by steelmakers in Hebei posted an on-month increase amid high supply and low demand, with the sub-index rising 8.8 basis points on month to 56.3, the association noted.
And the sub-index for raw materials stocks held by these steelmakers also reversed up by 3.5 basis points on month to 41.9 last month, due to the decline in mills' operating rates, the release showed.
Source:Mysteel Global
