Posted on 10 Nov 2021
The Purchasing Managers' Index for the steel industry in North China's Hebei province, the country's top steel production base, moved down further for the third month in October, slipping by another 1.2 basis point on month but remaining firmly in the contraction zone at 41.8, according to the latest release by the Hebei Metallurgical Industry Association on its website. Hebei's steel PMI has been hovering below the threshold of 50 since May.
The province's result for October was 3.5 basis points higher than that of the national steel PMI, which saw a substantial fall of 6.7 basis points on month after the short-lived recovery in September, Mysteel Global noted.
Last month, the sub-index for new orders among Hebei's local steel mills declined further to 34.8, down another 4.3 basis points on month, indicating that the weakness in demand persisted into October as orders from users decreased.
However, the sub-index for new export orders reversed up 9.2 basis points on month to 40.9 in October after the continuous decrease over the prior five months, as demand from overseas buyers in some regions improved. Meanwhile, stronger international prices also encouraged Chinese steel mills and traders to sell more products to overseas buyers after domestic steel prices had fallen sharply, the association pointed out.
During October, the sub-index for Hebei's steel production continued to trend downward to reach 38.3, lower by another 2.1 basis point on month. The report cited the ongoing restrictions on production among local steel mills to lower their crude steel output and reduce energy consumption.
Finished steel stocks at the steel mills started to accumulate in October, due to the lackluster demand from end-users, with the sub-index up 3.5 basis points on month at 42.6.
Last month, the sub-index for raw materials stocks held by Hebei steel mills reversed down after the rise in September, declining by 2.2 basis points on month to 39.1. The province's steelmakers were reluctant to build up their raw materials stocks and instead bought only for their immediate needs, considering the production curbs being imposed for winter and the limited sales in the physical market.
Source:Mysteel Global
