In July, the stainless steel PMI was 49.8%, down 0.07 percentage points; in August, steel mills are expected to see an increase in production, leading to an upward trend in economic activity [SMM Analysis]

In July, the national manufacturing PMI was 49.4%, down 0.1 percentage points from June, mainly due to high temperatures and some natural disasters affecting business activities. The production index was 50.1%, still showing slight growth, but the new order index was 49.3%, continuing to decline from the previous month. According to SMM data, the stainless steel PMI in July was 49.8, continuing to decline from 49.87 in June, mainly due to weakened downstream demand during the traditional off-season. The new order index fell from 49.85% to 49.65%, exacerbating the oversupply situation. The oversupply and continued low spot prices led to losses at stainless steel mills. The production index in July was 49.97%, slightly recovering from June decline, but the overall trend of reduced production remained unchanged.

SMM predicts that the stainless steel PMI index in August will be 49.84%, still below the 50 mark, but with a slight recovery in the level of economic weakness. It is expected that stainless steel production will increase in August, raising the production index to 49.89, while end-user demand remains weak, with the new order index expected to be 49.62%. Another point worthy of attention is the continued rise in NPI prices, which increases industry costs, with the purchase price index falling from 49.76% to 49.75%. In summary, the overall economic activity of stainless steel in August is expected to be close to that of July, but with the expectation of the traditional peak season and some production resumptions of steel mills, the overall economic activity is expected to rise.