In January this year, the purchasing managers index (PMI) for the Chinese steel sector was at 46 percent, remaining at the same level compared to December last year, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).
Moreover, in January, the new order index stood at 43.8 percent, 0.8 percentage points higher than that recorded in December, while still below 45 percent, signaling slack demand from downstream users.
In the given month, the production index for the Chinese steel sector stood at 43.7 percent, 2.1 percentage points lower than in December.
In January, the finished steel inventory index stood at 43.7 percent, 0.8 percentage points higher than that in December and indicating a second consecutive month-on-month increase, while the index hit its highest level in nine months.
In January, the index of raw material purchase prices stood at 57.8 percent, 18.7 percentage points lower than in December, showing the slowdown in the growth of raw material prices.
As for February, demand for steel may continue to be sluggish due to the Chinese New Year holiday (February 9-16), while transaction activities in the steel market will shrink significantly and so steel prices may move sideways in the given month. Moreover, raw material prices may edge down further amid the slack performance in the steel market.