Posted on 08 Oct 2024
The Purchasing Managers' Index (PMI) for China's steel industry scored 49 in September, up significantly from August's 40.4, indicating that the sector is recovering, the official index compiler - CFLP Steel Logistics Professional Committee (CSLPC) announced in its latest release on September 30.
The CSLPC pointed out that during September, domestic steel demand picked up, steel production grew moderately, the pace of the decline in raw materials prices slowed, and finished steel prices recorded gains.
In September, the sub-index of new steel orders was 47.2, compared with 38.5 in August, as demand had recovered overall with the autumn peak demand season approaching. The index had also risen substantially at the end of the month from the industry's boost in confidence generated by the central government's new polices for economic revival, according to the committee.
As for production, this sub-index reversed up this month from a three-month fall, marking a return to the expansion zone at a near four-year high of 54.8, as against 34.9 in the prior month. Rising demand had spurred Chinese steel mills' enthusiasm for cranking up output, the CSLPC explained.
Daily crude steel production began trending upwards from mid-September, the committee said, quoting data from the China Iron and Steel Association, with the output volume among the member mills climbing by 2.7% from early September to average 1.99 million tonnes/day over September 11-20.
Meanwhile, the sub-index of procurement prices for steelmaking raw materials stood at 27.7 in September, higher than the 19.6 for August. The committee said prices of raw materials had not witnessed substantial growth despite the recovery in procurement, adding that the sub-index remained in the contraction zone below 50.
For October, steel demand may continue to expand in tandem with the favourable housing market policies and bullish market sentiment, the CSLPC predicted. It added that steel production may keep rising, driven by healthier profit margins, higher demand and low steel inventories, and that both prices of steel and raw materials may increase.
Source:Mysteel Global
