China's Sept steel PMI declines for fourth month to 43.9

"Sub-indices showed that the (steel) demand was below expectation, steel output declined accordingly, and the momentum of raw material price surges eased obviously, or in short, the market was not as robust as it should have been," CSLPC commented on September steel market performance.

However, related enterprises remain hopeful in the near term, as both the raw materials procurement and stocks grew steadily, and "in October, there is still room for steel demand to grow, and steel mills' output may recover, though the total production for Q4 may be lower on quarter," it added.

For the fourth quarter, uncertainties will persist in steel demand though there is still room for growth, as the manufacturing sectors such as construction, machinery, and automaking have been recovering steadily, and infrastructure construction may accelerate further in October, though the optimism on higher steel demand from the property market have waned among the uncertainties and possible tightening control by the authorities, CSLPC highlighted.

For September, the sub-index for new orders including steel sales at home and abroad declined for the second month and at a faster pace of 9 basis points on month to 36.6, and it had been below the threshold of 50 for four successive months or a new low since February, according to CSLPC.

In the overall dismal situation, the sub-index for China's new orders for steel exports, however, recovered 11.9 basis points on month to 46.6 in September, as global steel demand recovered amid restart of economic activities.

China's domestic steel demand from end-users, however, stayed mediocre, even though "the construction steel market has been freed from the impact of high temperature and frequent rainfalls... and flat steel market had been dragged by longs as well as higher output," the committee stated.

Lower-than-expected demand and high raw materials costs the sub-index of steel production decline for the third month by 3.3 basis points on month to 46 for September.

For the whole September, daily crude steel production among China's major steel mills is expected to decrease 0.55% on month to 2.14 million tonnes/day, SLPC quoted the data from China Iron and Steel Association (CISA).

By September 20, stocks of five major finished steel products in the commercial warehouses of China's 20 cities inched down 0.1% from September 10 to 12.42 million tonnes, according to the CISA data.

Source: CSLPC

Written by Anna Wu, wub@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com