The PMI index in China’s steel industry stabilized at 49.9% in July

In July 2023, the Business Expectations Index (PMI) for China’s steel sector was 49.9%, which is the same as in June 2023. This was announced by the China Steel Logistics Committee (CSLC), reports SteelOrbis.

The production index in China’s steel industry for the past month was 49.9%, which is 2.6 pp exceeds June data. The index of new orders increased by 1.7 pp m/m – up to 49.8%, which reflects expectations of stable demand in the current month.

The index of purchase prices for raw materials amounted to 69.9%, which is 27 percentage points higher than in June. In July, prices for raw materials for steel production showed an upward trend amid improved trading activity.

Steel demand is forecast to rise in August amid Chinese policymakers’ determination to boost local demand, including lifting restrictions on home purchases in several megacities, implementing urban renewal policies and boosting demand for vehicles and home appliances.

However, high temperatures and occasional typhoons will negatively affect steel demand. It is expected that steel prices may fall during August, but recover in September and October.

As GMK Center reported earlier, China in January-June 2023 increased steel production by 1.3% compared to the same period in 2022 – up to 535.64 million tons. In June, Chinese steelmakers increased steel production by 1.1% compared to May and 0.4% compared to June 2022 – up to 91.11 million tons. Factories were encouraged to increase production amid rising product prices.