SHANGHAI, Mar.26 – Steelease survey shows that transportation sector saw slight improvement in February with PMI up 3.4 MoM to 55.12, but still 0.76 lower than a year ago. As most enterprises closed for the Chinese New Year holiday in February and did not resume production until March, increase in downstream orders was weaker than expected. The approval and capital for new projects were negatively affected as the Ministry of Railways was incorporated into Ministry of Transport. Besides, some enterprises reflected that the approved projects have not been initiated as investors were still watching on the sidelines due to the adjustment of staff in local governments and policies after the NPC and CPPCC sessions. Steelease has learnt that the integration of the Ministry of Railways and Ministry of Transport will exert little influence on railway operations, but sources reported that the railway construction schedules may be adjusted accordingly.
Purchasing prices of downstream buyers were lower than pre-holiday levels as steel prices have been falling after the holiday, Besides, most downstream enterprises still bought goods as needed despite low inventories. Some enterprises predicted risks from environmental protection.