In July this year, the purchasing managers' index (PMI) of the steel sector in China’s Hebei Province decreased to 42.5 percent, down 13.6 percentage points month on month, reflecting the downward pressure on the provincial steel industry, as announced by the Hebei Province Metallurgical Industry Association (MIA). In the given month, the trend of the PMI for the steel sector in Hebei Province was the same as that for the whole of China, which edged down by 2.0 percentage points month on month to 47.8 percent, as announced by the China Steel Logistics Committee (CSLC).
In June, the overall new order index for Hebei Province’s steel sector decreased to 33.8 percent, down 30 percentage points compared to the previous month. The hot weather in northern China exerted a negative impact on construction activities, impacting demand for steel significantly.
In the given month, the new export order index for Hebei Province’s steel sector decreased to 45.7 percent, down 4.3 percentage points month on month. Uncertainties from the overseas market negatively affected steel exports.
In the given month, the production index for Hebei Province’s steel sector declined to 47.6 percent, down 9.5 percentage points month on month. Slack demand in the traditional offseason limited steelmakers’ production activities.
At the same time, the inventory index for finished steel in Hebei Province rose to 57.5 percent, up 16.5 percentage points month on month.
In June, the inventory index for raw materials in Hebei Province stood at 35.4 percent, down 15.8 percentage points month on month.
In the given month, the purchasing price index for finished steel in Hebei Province decreased to 19.5 percent, down 63.8 percentage points month on month. Iron ore and semi-finished steel prices edged down, while scrap prices moved down continuously, resulting in big decreases in the purchasing price index for raw materials, which stood at 17.9 percent, down 59.5 percentage points in June.
The sluggish demand may continue to negatively affect the steel industry in Hebei Province, while raw material prices may bolster steel prices to some extent, which may result in a fluctuating trend for finished steel prices in July.