Posted on 01 Jul 2026
China's Purchasing Managers' Index (PMI) for the steel industry remained largely steady in June at 47.8, according to the latest release from index compiler CFLP Steel Logistics Professional Committee (CSLPC) issued on June 30.
The figure was lower by a marginal 0.1 points from May and stayed in the contraction zone below 50, reflecting the deepening off-season pressures and lingering softness of steel industry fundamentals, the committee noted in the release. It blamed weather events for impacting domestic steel consumption during the month.
China's steel exports also suffered this month, as steel demand in major overseas markets remained subdued due to the slow recovery of their manufacturing sectors, the CSLPC added.
As such, the sub-index of new steel orders and new steel export orders contracted by 0.5 and 1.8 points on month respectively to 46.3 and 46.8 in June, the committee's results revealed.
Sluggish steel demand and eroding profitability led the steelmakers to extend their controls on output, with the production sub-index staying in the contraction zone at 49.3 despite an on-month increase of 0.6 points, the CSLPC data showed.
Moreover, the subdued steel demand led to a sharp increase in steel inventories, with the sub-index for steel stocks soaring back to the expansion zone at 52.9 with a 9.9-point on-month gain, the report showed.
The steady production activity secured the steelmakers' demand for raw materials, with the sub-index of raw material procurement witnessing a mild on-month gain of 2.6 points to 50.3 in June.
Meanwhile, production costs for Chinese steel mills have stayed elevated due to high prices of steelmaking raw materials, with several price hikes in coking coal being accepted throughout the month. On the other hand, prices of iron ore and steel scrap showed signs of weakening due to high portside stocks and subdued demand respectively, the committee pointed out.
For July, the committee expects that domestic steel demand will remain at low levels, as heatwaves will affect much of the country and cause work on outdoor construction projects to slow. On the other hand, the enthusiasm for production among steelmakers is likely to contract next month, suppressed by sluggish downstream demand and reduced profit margins.
Meanwhile, the committee predicts that lower steel consumption at home and easing geopolitical tensions in the Middle East will drive down steelmaking raw material prices, while finished steel prices would lose ground due to fading cost support and mounting inventories.
Source:Mysteel Global
