Posted on 05 Dec 2024
The Purchasing Managers' Index (PMI) for the steel industry in North China's Hebei province, the country's top steel production base, dropped by 6.2 percentage points on month to sit at 44.5 in November, falling once again below the threshold of 50 signalling contraction, according tothe Hebei Metallurgical Industry Association.
Hebei's PMI last month was 6.1 percentage points lower than that of China's national steel PMI, which decreased by 4 percentage points on month to 50.6 in November but remaining within the expansion zone, as reported.
China's steel market was generally weak in November due to the winter falloff in demand, with the sub-index for new orders received by Hebei's local steel mills declining by 9.8 percentage points on month to 43.9 last month.
Meanwhile, the sub-index for new steel export orders won by Hebei mills also fell in November, mainly due to a rise in trade cases targeting Chinese steel products, with the reading falling by 9.5 percentage points from October to 42.9.
Amid their lower profits and even losses last month, many steelmakers in Hebei opted to scale back production or halt operations to conduct maintenance in November. Accordingly, the sub-index for steel output in Hebei plunged by 10.8 percentage points on month to 42.9 last month.
Dull steel demand in tandem saw steel stocks mount last month, with the sub-index for steel inventories held by Hebei steelmakers jumping by another 12.8 percentage points from October to reach 55.1.
As such, many steelmakers chose to maintain their stocks of raw materials at relatively low levels, the Association noted. However, there were also some mills that moderately increased their procurement of feedstocks as protection against disruptions to logistics and deliveries caused by winter rain and snow. The sub-index for raw material stocks held by local steelmakers gained 3.6 percentage points on month to 44.1 in November.
Source:Mysteel Global
