CSLPC: China’s Dec steel PMI reverses down to 45.8
Posted on 04 January 2021
The Purchasing Managers’ Index (PMI) for China’s steel industry for December scored 45.8, or reversing down by 3.4 basis points on month, and the details disclosed signs of cautiousness in both demand and supply, according to the latest release from CFLP Steel Logistics Professional Committee (CSLPC) on December 31, the country’s authorized index compiler.
In December, “the domestic steel demand has shown signs of prudence, and the domestic steel mills, accordingly, have trimmed their output, leading to the slow-down in the rises of raw materials procurement, while raw materials prices and finished steel prices have strengthened together,” CSLPC summarized.
For the whole 2020, “China’s steel demand and production have both been up steadily with the latter likely to hit a record high, and the Chinese steel mills have been enjoying stable margins,” the committee added.
For January 2021, both steel demand and supply may tighten, and raw material prices may soften and the domestic steel prices may spiral down, according to CSLPC.
In December, the sub-index of new steel orders both from domestic and overseas buyers reversed down by 5.2 basis points on month to 42, or below the threshold of 50 for seven consecutive months, according to CSLPC, among which that from the overseas buyers, however, rebounded strongly by 8.5 basis points on month to 54.4 thanks to the recovery in the manufacturing sector with automaking in particular, the committee shared.
At the same time, the sub-index of China’s domestic steel production also reversed down by 5.6 basis points on month to 47.7 due to the winter restriction and the growing cautiousness among the steel producers, and the daily crude steel output may be down 0.43% on month, according to the estimation of the China Iron & Steel Association (CISA).
Weakening demand in general saw the finished steel inventories at CISA’s member steel mills reverse up by 2.9% or 370,800 tonnes on month to around 13.1 million tonnes as of December 20, the committee quoted the CISA statistics.
The finished steel inventories at the commercial warehouse in China’s 20 cities, in contrast, has been declining, with the volume of the five major finished steel including both longs and flats down 310,000 tonnes in ten days to 7.3 million tonnes as of December 20, among which rebar declined the most by 190,000 tonnes to 3.85 million tonnes, according to the CISA data.
In contrast to the less promising situation in demand and supply, the Chinese steel mills, nevertheless, saw their finished steel prices up with the Shanghai rebar pricing index touching its two-year high of Yuan 4,596/tonne ($702/t) as of December 21, or up Yuan 541/t within December.
Though steelmaking raw material prices had been followed up the trend, and the 62% iron ore fines pricing index, for example, surged by $46.3/dmt from end of November to $164.25/dmt as of December 28, CSLPC noted, which imposed pressure on the Chinese steel mills.
Written by Rong Zhang, email@example.com
Edited by Hongmei Li, firstname.lastname@example.orgSource : Mysteel Global