Posted on 03 Mar 2023
The Purchasing Managers' Index (PMI) for the steel industry in North China's Hebei province, the country's top steel production base, strengthened for a third consecutive month during February to hit a five-year high of 60.7, jumping by another 9.6 basis points on month, according to the latest data released by the Hebei Metallurgical Industry Association.
Hebei's February result was also 10.6 basis points higher than that for the national steel PMI, though this reading also climbed from January, rising by another 3.5 basis points on month to reach 50.1, connoting expansion, as Mysteel Global reported.
Last month, the sub-index for new orders among Hebei's steel mills soared by 19 points on month to reach 69, thanks to the steel demand recovery and active steel trading following the Chinese New Year holiday that ended on January 27.
Although the global economy is under pressure and steel consumption growth has slowed, Chinese steel exports still found some upward momentum on the back of improved global supply-chain conditions, the Association observed in a statement. This caused the sub-index for new export orders in February to rise 4.5 basis points on month to 46.2, the data show.
Meanwhile, the sub-index for Hebei's steel production also posted an on-month increase of 10.5 basis points to reach 62.8, due to the steady rise in blast furnace and electric arc furnace operating rates.
At the same time, the sub-index for finished steel stocks held by steelmakers in Hebei plunged by 29.3 basis points on month to 47.5, reflecting the buoyant trading activity stemming from the recovery of demand among steel end-users.
In addition, the sub-index for raw materials stocks held by these steelmakers also declined by 10.3 basis points from January to record 48.8 for February, according to the release. The total price increase for raw materials was greater than the rise in finished product prices, resulting in thin profit margins for the mills, the Association pointed out, with the result that steelmakers chose to procure raw materials only as necessary.
Source:Mysteel Global
