Posted on 03 Feb 2026
After dropping for two months, China's Purchasing Managers' Index (PMI) for the steel industry recovered slightly in January to register 49.9, according to the latest release from the CFLP Steel Logistics Professional Committee (CSLPC) published on January 31. The result represented a large 3.6% jump from December and just fell short of pushing the reading over the 50 threshold connoting growth, Mysteel Global notes.
The sub-index for new steel orders recovered to 50.2 in January from December's 45.4, coming back to the expansion zone after five months, according to the CSLPC release.
Although most outdoor construction activity has slowed down or fully halted due to low temperatures and the upcoming Chinese New Year break, there were still some building contractors rushing to finish infrastructure projects during the month that stimulated downstream demand and boosted steel orders, the CSPLC said.
In addition, market participants have raised their expectations for steel demand, given that 2026 is the first year of China's 15th Five-Year plan, a factor which also lent some support to steel demand in January.
But the reintroduction of Beijing's steel export licensing policy from January 1 had exerted pressure on steel exports. The sub-index of new export orders had retreated to 37.9 in January from December's 41, the report observed.
Domestic steel output recovered last month as local governments in North China eased their production curbs for pollution control, causing the production sub-index to rebound from December's 43.7 to 48.4 in January, the report noted.
Citing data from the China Iron and Steel Association (CISA), CSLPC noted that daily crude steel output among CISA member mills averaged 1.98 million tonnes/day over January 11-20, dropping slightly by 0.9% compared to the same period in December.
Higher output also reversed the declining trend in steel inventories last month, with the sub-index for steel stocks registering 52.2 compared to December's 46.1, the release indicated.
More active steel production inevitably lifted consumption of raw materials, with the sub-index for raw material procurement jumping to 57.9 last month from 44.5 in December, marking the highest level in seven years. High demand for raw materials also gave support to their prices, with the sub-index for raw material prices determined at 44.3 in January, jumping from 30.6 in December, the association's release indicated. By product, prices of iron ore and steel scrap recovered mildly, while coking coal prices trended downwards last month.
For February, the committee predicts that steel demand will drop again as most construction work and steel purchases will stop due to the Chinese New Year holiday in mid-February.
As for steel supply, the CSLPC expects steel output to drop further this month. It also forecasts that prices of steelmaking raw materials and finished steel will both be rangebound in February.
Source:Mysteel Global
