CSLPC: China's steel PMI dips to 44.2 in March

The fall indicated that the country's steel sector weakened last month, CSLPC said, noting that China's steel demand recovered at a slow pace, while steelmakers' production declined and both prices of raw materials and finished steel production trended downwards.

In March, the sub-index of new steel orders had rebounded by 3 percentage points on month to 44.4, though this was still at a low level and below 45, the committee noted. "Many traders became bearish regarding steel demand for infrastructure development and the property market," it said.

For China's steel production in March, the sub-index reversed down by 7.5 percentage points from February to a ten-month low of 37.7, as the enthusiasm of steelmakers for ramping up output eased due to the slow rise in demand, according to CSLPC.

Daily crude steel output among member mills of China Iron and Steel Association (CISA) declined further by 0.5% from early March to average 2.05 million tonnes/day over March 11-20, CSLPC said, quoting CISA data.

Meanwhile, the sub-index of steelmaking raw material procurement prices also tumbled to a ten-month low of 22.4 in March, slumping by 27.1 percentage points on month, mainly as steel producers' buying of raw materials decreased due to falling steel production, CSLPC said.

For April, "domestic steel demand may rise slowly and the room for growth may be limited," CSLPC warned. "Steel output may increase modestly, while prices of raw materials and finished steel may continue to drop," it suggested.

Written by Rong Zhang, zhangronga@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com