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China’s steel industry’s PMI fell to 45% in April, falling by 3.4 percentage points from the previous month and falling for the second consecutive month, according to the China Federation of Logistics & Purchasing.
Sub-indexes show that steel market demand tightened, steel production declined, raw material prices dropped significantly, and steel prices trended lower, it said, adding that the steel industry is not thriving in the peak season.
Due to the continued downturn in the real estate sector, a slowdown in infrastructure project due to a month-on-month drop in local government bond issuance, and a month-on-month drop in passenger car sales, China’s steel market demand has tightened and the sub-index for new orders slid by 10.3 percentage points to 39.9%, snapping a four-month gaining streak and slipping into contraction again, it said.
Notably, Chinese steel mills’ exports rebounded, with the sub-index for new export orders at 55.5%, due to the drop of overseas alternative products and the competitive advantage in Chinese steel prices, it said.
The supply and demand of the steel market may continue to decline slightly in May, iron ore prices may drop further and steel prices may continue to fluctuate downward, it said.