SHANGHAI, Nov. 3 (SMM) -- The China Federation of Logistics and Purchasing (CFLP) said that China's Purchasing Managers' Index (PMI) dropped to 50.4% in October after rising for two consecutive months, down 0.8 percentage points from September. New export orders declined as well.
A recent Steelease survey shows that the climate of construction, machinery, automobile, home appliance and hardware industries slipped in October. The Steeleaes composite PMI was 46.23% during October 2011, down 0.5% MoM, indicating steel downstream industries continued to contract. By industries, the PMI of construction industry was 45.90%, down 0.93% MoM and down 0.87% YoY; the PMI of machinery industry was 46.34%, up 1.22% MoM, but down 6.55% YoY; the PMI of automobile industry was 55.39%, down 6.65% MoM, and down 1.63% YoY; the PMI of home appliance industry was 53.92%, up 11.04% MoM, and up 1.52% YoY; the PMI of hardware industry was 42.10%, down 4.06% MoM, and down 12.47% YoY. Such indexes were confirmed by aluminum industry.
According to a recent SMM survey, operating rates at aluminum profile producers were 69.4% in October, down 2% MoM, while operating rates at aluminum plate, sheet and strip producers were 54.4%, down 5.8% MoM. Slipping export orders and weakening domestic demand were responsible for lower operating rates at aluminum processors in October.
New orders at aluminum processors for November see no significant improvement, and the surveyed processors said future orders grow slowly and they will strengthen marketing efforts in a bid to maintain current production. SMM remains pessimistic toward future aluminum consumption growth given tight credit, slow destocking and lower new orders.