Posted on 11 Oct 2024
After decreasing for four consecutive months, the Purchasing Managers' Index (PMI) for the steel industry in North China's Hebei province, the country's top steel production base, finally rebounded in September, jumping by 11.3 percentage points from August to reach 45.7, according to the Hebei Metallurgical Industry Association. Nonetheless, the index remained under the threshold of 50 and in the contraction zone, Mysteel Global observed.
Hebei's PMI last month was 3.3 percentage points below that of China's national steel PMI which gained 8.6 percentage points on month to 49 in September, as reported.
In Hebei during September, the sub-index for new orders received by the province's steel mills jumped by 15.9 percentage points on month to 41.5. Weather conditions for outdoor construction works had improved, replenishment demand for steel ahead of the country's week-long National Day holiday increased, and the central government's economic pump-priming policies announced late last month all combined to lift Hebei's steel market overall, the association concluded.
Regarding overseas markets, the sub-index for new steel export orders won by Hebei mills stayed largely stable last month, rising by just 0.1 percentage point on month at 52.3.
Thanks to improved market sentiment, steel prices had rebounded significantly which helped to lift the profitability of the steelmakers, Mysteel Global notes. Most steel mills in Hebei were enthusiastic about resuming or scaling up their production, the association remarked. During September, the sub-index for Hebei's steel production soared by 21.4 percentage points on month to reach 50.
More intensive steel trading activity led the sub-index for steel inventories held by steelmakers in Hebei to decline by 19.2 percentage points on month to sit at 37.2 in September.
Meanwhile, the sub-index for raw material stocks held by local steelmakers rose by 9.6 percentage points on month to 42.9. Local steelmakers needed to build their feedstocks in line with their increases in production, but at the same time, the recovery in steelmaking raw materials prices also constrained the mills' appetite to some extent, the association observed.
Source:Mysteel Global
