Exclusive: Low season weighs on China's steel PMI in Jul

SHANGHAI, Jul 30 (SMM) – China’s steel purchasing managers’ index (PMI) in July came in at 46.61, up 0.04 from June but down 0.38 from a year ago, according to SMM’s China Steel PMI Monthly report published on Monday July 30.

Seasonally adjusted, the steel PMI stood at 52.18, down 0.41 on the month and 0.61 on the year.

The divergence of the PMIs before and after seasonal adjustment indicated that demand remained strong after seasonal factors were excluded.

Except shipbuilding, production fell across all other downstream sectors. The index for production gained 0.15 on the month and 3.75 on the year and stood at 43.89. New orders were poor as the low season continued across most downstream sectors. The index for new orders increased 1.03 month on month to 44.74 but slid 4.18 from a year earlier.

Production and new orders continued to fall across the machinery sector in the low season. Tight cash flows kept most producers restocking only as needed. 

In the home appliance sector, production and new orders extended their declines. With current high temperatures in the summer, some producers planned to close or undertake maintenance.

Most construction sites rushed to meet deadlines in July, even as the weather and environmental issues affected some sites. Tight cash flows and higher prices of raw materials limited purchases.  

Declines of construction in the transport sector slowed in July, with some firms hurrying to meet deadlines.

Demand weakened in the automobile sector, except for new-energy vehicles.

Production and new orders continued to grow across shipbuilding. Some large shipbuilders recruited short-term workers to fulfill orders, which were full. Shipbuilders continued to purchase raw materials as needed. 

End-use sectors remained in the low season, except shipbuilding. Environmental checks affected production while tight cash flows and falling orders drove end-users to restock as needed. 

For more details on China’s steel downstream industries, please refer to SMM China Steel PMI Monthly.