Hebei steel PMI dips further to 47.7 in January
Despite the decline, Hebei’s January steel PMI was still 0.6 basis point higher than the 47.1 recorded for the national steel industry, Mysteel Global notes.
“The continuing decline in Hebei’s PMI (for January) was mainly because of further drops in new orders,” Wang Dayong, the association’s secretary general was quoted in the release explaining.
As for February, both the steel production and demand in Hebei are expected to be affected by the Novel Coronavirus (2019-nCoV) by various degrees, though the impact on the demand is anticipated to be more pronounced as many downstream users with construction sites in particular have been requested to delay the resumption of operations, the association predicted.
Steel prices, though, are likely to be rangebound in near term with the possible shrinking in both demand and supply, according to the association.
For January, the sub-index for the province’s new orders for steel products declined further by 1.2 basis point on month to 44.6, as demand from downstream users shrank further because of the Chinese New Year (CNY) holiday and the outbreak of the 2019-nCoV, the association explained.
The sub-index for Hebei’s steel production reversed up slightly by 0.3 basis point from December to 48.5 for January, still in the contraction zone, indicating that the local steel supply remained largely stable, as steel mills had tried to produce as much amid winter restrictions when the steel margins were still at reasonable levels as well on the anticipation of the demand revival after the CNY holiday.
Last month, finished steel stocks across Hebei saw a significant rebound amid lower demand while stable production, with the sub-index for steel stocks up 8.5 basis points on month to 52.5, according to the association’s data.
The provincial association did not release its own steel inventories or steel output in volume, but quoted the data from the China Iron and Steel Association (CISA), showing that over January 11-20, the daily crude steel output among CISA’s member steel mills averaged 1.98 million tonnes/day, up another 0.4% from that for January 1-10, and the finished steel inventories among the members grew by 10.2% from the end of December to 10.5 million tonnes as of January 10.
Written by Nancy Zheng, zhengmm@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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