Posted on 02 Jun 2026
China's Purchasing Managers' Index (PMI) for the steel industry dipped slightly last month to 47.9, according to the latest release from index compiler CFLP Steel Logistics Professional Committee (CSLPC) issued on May 31.
This represented an on-month retreat of 1.3 points from April and kept the index result in the contraction zone below 50 for a second month, the committee noted in a release.
Specifically, the sub-index for new steel orders dropped by 2.4 points on month to sit low at 46.8, the CSLPC release data showed.
In global steel trade, the recovery of manufacturing in major economies remained weak in May though demand in some emerging market countries showed signs of recovery. Against this backdrop, China's steel industry continued to strengthen competitiveness in steel exports by leveraging the advantages of "ample production capacity and well-established supply chain", the CSLPC highlighted in the release.
As such, the sub-index of new steel export orders rose by 2.1 points on month to reach 48.6 in May, the committee's results revealed.
Meanwhile, production costs for major steel items soared last month due to surging steelmaking raw material prices. Prices of iron ore, coking coal, coke and steel scrap all posted significant on-month gains in May, the CSPLC claimed, leading the sub-index for raw material prices to log a double-digit gain last month, it added.
Despite declining end-user demand and rising production costs, steelmakers kept their production level steady over the month, with the production sub-index remaining unchanged on month at 48.7, the report indicated.
The sluggish demand has also slowed the pace of steel inventory drawdown, with the sub-index for steel stocks edging up by 0.7 percentage points to 43 in May, according to the CSLPC.
For June, the committee expects that the domestic steel demand will remain largely steady. Operations among major steel-consuming sectors like construction, infrastructure development, machinery and automobile manufacturing, and home appliances are forecast to stay stable.
However, ongoing seasonal rains in southern China as well as high temperatures in many areas of the country will continue to disrupt outdoor construction activities and place downside pressure on actual steel demand, the report noted.
On the supply side, the CSLPC predicts that steel production will face more pressure this month, mainly from sluggish demand and high raw material prices.
Meanwhile, the committee predicts that an easing of tensions in the Middle East will cool the sharp gain in steelmaking raw material prices, while finished steel prices would be rangebound due to firm cost support and subdued spot transactions.
Source:Mysteel Global
