CSLPC: China's March steel PMI dips 2nd month to 44.3

This month, frequent coronavirus flare-ups in China had significantly affected the country's steel sector, with steel production declining modestly, domestic demand tightening in general, and steel prices moving up, while the transportation of steel and steelmaking raw materials had been under mounting pressure, CSLPC summarized.

"For April, steel demand may improve at a fast pace, and steel output may pick up, while steel mills may be still under cost pressure, and steel prices, thus, may incline slightly," the committee estimated.

In March, China's sub-index of steel production fell for the second month, down another 3.8 basis points on month to 45.4. In first half of this month, mills were imposed on production curbs for environmental protection during the Winter Paralympic Games and "Two Sessions" political meetings, but steel output among mills was relatively stable.

Meanwhile, during the latter half of this month, steel mills' production was largely dampened by the resurgence of COVID-19 cases in many regions and rising raw material prices and logistic costs, CSLPC explained.

Over March 1-20, China's daily crude steel output nationwide averaged 2.62 million tonnes/day, or down 2.1% from the average for January-February, the committee quoted the data from the China Iron & Steel Association.

During March, Chinese steel mills saw their steelmaking raw material costs rise, including those of iron ore and coke, which was mainly due to the geopolitical tensions and new coronavirus outbreaks.

Accordingly, China's sub-index of the steelmaking raw materials procurement prices scored a new high since May 2021 at 65.2, or up for the fourth straight month by 7.1 basis points, the CSLPC data showed.

Written by Rong Zhang, zhangronga@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com