Steel production in China is recovering in February

The purchasing managers’ index (PMI) in the Chinese steel industry for February was 48.6, or increased by 4.3 basis points for the month, indicating “an obvious recovery in both domestic demand and supply, despite the celebration Chinese New Year (CNY) ended on February 11-17.

Last month, “the domestic steel market continued to rebound moderately despite the yuan factor, and domestic demand for steel improved after the holidays, foreign demand continued to rise, steel production clearly increased, social stocks accelerated, raw material prices remained high, and steel prices , thus, have grown dramatically ”, – summed up the CSLPC.

According to the committee’s forecasts, domestic demand and supply for steel may strengthen further in March, while inventory reduction may accelerate, and the price of steel may spiral and the price of iron ore may remain high.

In February, the new steel orders sub-index for both domestic and overseas sales rose sharply by 8.3 basis points per month to 43.3 as the national economy returned to normal and domestic infrastructure construction freed up further demand, the Committee shared. noting that China will soon be in the peak of steel consumption in March-April.

Steel purchases from overseas remained robust amid ongoing recovery in various economies, with new Chinese steel export orders rising 6.2 basis points month on month to 61.4 in the subindex, according to CSLPC data.

In terms of steel production, the sub-index rose an additional 6 basis points in the second month from the previous month to 54.7 as many steel mills were able to resume normal operations or operate their blast furnaces more quickly with high engagement thanks to their employees. celebrate at the CSLPC when they celebrate the Chinese yuan in their migrant cities, and many businesses have been exempt from pollution-related restrictions due to their ultra-low emissions.

The anticipation of a faster recovery in demand and an imminent peak consumption season has led to the move of finished steel stocks to traders from steel mills, and steel mills members of the China Iron and Steel Association (CISA), thus, published their stocks of finished steel – the index fell by 10.6 basis points on a monthly basis to 38.1 points in February.

Stocks of five main types of metal products in commercial warehouses in 20 cities in China increased by 3.45 million tons from February 10, or by 7.5 million tons from the beginning of 2021 to 14.8 million tons as of February 20, among which the sharpest increase – 2.2. million tons from February 10 to 7.8 million tons, CLSPC reports citing CISA data.

However, in the past month, Chinese steel mills continued to be under pressure from high raw material prices, although the sub-index for purchasing prices for steelmaking raw materials was 63.7, which is 4.8 basis points lower than in the month, but was higher than 60 for the fourth time. . month in a row, – the committee has shared.

For example, the 62% iron ore price index approached the record high on February 26 at $ 176.65 per tonne, up $ 20.6 per tonne per month, and the billet price in Hebei province by north of China rose 480 yuan a tonne ($ 74.3 a tonne), according to published data.

China’s domestic market had seen good capital inflows by the end of January, according to the committee, as recently issued bank loans totaled 3.58 trillion yuan, or 225.2 billion yuan, compared to last year.

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