Posted on 06 Dec 2022
The Purchasing Managers' Index (PMI) for the steel industry in North China's Hebei province, the country's top steel production base, slipped for the third consecutive month in November, losing 3.5 basis points on month to 41.5 and falling further below the threshold of 50 connoting contraction, according to the latest release by Hebei Metallurgical Industry Association.
Nevertheless, Hebei's November result was still 1.4 basis points higher than that for the national steel PMI, which fell further by another 4.2 basis point on month to just 40.1, as Mysteel Global reported.
In November, the sub-index for new orders among Hebei's steel mills was 39, dipping 2.7 basis points from the previous month, mainly due to the weakness of steel demand.
Last month, the sub-index for new export orders dropped further too, losing 8.6 basis points on month to 29.5. The Association blamed the succession of interest rates hikes by the US Federal Reserve for tempering global steel demand.
The sub-index for Hebei's steel production in November also posted an on-month decline of 7.2 basis points to reach 40.5, reflecting reduced operations among both blast-furnace and electric-arc-furnace mills. The mills last month responded to thinner profit margins or even losses by reducing production, while at the same time many in Hebei were required to control output as part of air-pollution reduction measures, as Mysteel Global reported.
Finished steel stocks held by steelmakers in Hebei also decreased substantially last month, pushed lower by their active destocking and reductions in output, with the sub-index edging down by 3.8 basis points on month to 52.5, the Association noted.
Furthermore, the sub-index for raw materials stocks held by these steelmakers also retreated 3.8 basis points lower from October, recording just 38.1 for November, according to the release. Under the pressure of high production costs and dull demand in a traditional off-season for steel consumption, steel mills chose to be cautious and purchase just for their immediate production needs.
Source:Mysteel Global
