SHANGHAI, Jun 30 (SMM) – The PMI for steel downstream sectors stood at 49.86 in June, down 0.23 point month on month, but up 0.06 point year on year. The seasonally-adjusted composite index came in at 49.08, up 0.9 point on the month, but down 0.32 point on the year.
On the whole, steel’s end-use sectors weakened this month. The construction industry was greatly affected by high temperature and frequent rainfalls, while the machinery industry has not improved. Other manufacturing industries performed better. The index for production stood at 49.59, down 0.47 point month on month and up 0.03 point year on year. The index for new orders stood at 49.66, down 0.63 point on the month and 0.54 point on the year.
By sector
The PMI for the construction sector stood at 49.93 in June 2023, down 0.43 point on a monthly basis but up 0.87 point on a yearly basis. Seasonally adjusted, the composite index stood at 49.43 points, up 1.55 points month on month and up 0.57 point year on year. The construction industry as a whole weakened this month, and project construction progress slowed down due to high temperatures and rains. Some enterprises rushed to work due to construction schedule requirements. The number of new orders increased slightly from the previous month, and most of them were installation projects. In addition, most enterprises suffered cash flow issues, and the procurement of raw materials by enterprises was mainly on demand. Some enterprises increased their purchases in preparation for new projects.
The PMI for the machinery sector stood at 48.97 in June, down 0.34 points MoM and 1.10 points YoY. The seasonally-adjusted composite index stood at 48.37, up 0.18 points on the month and down 1.52 points on the year. The prosperity of the machinery sector has not improved significantly this month, and the sector was generally in the off-season. In terms of production, the operating rate of enterprises was relatively low, and some enterprises have stopped production. New orders also continued to decline month on month, with sluggish terminal demand having a significant impact on mechanical enterprises. There were layoffs planed by some enterprises. Affected by the downturn in the sector, the procurement demand for raw materials has gradually weakened.
The PMI for automobile infrastructure sector stood at 50.32 in June, down 0.28 points MoM and 1.89 points YoY. The seasonally-adjusted composite index stood at 49.20, down 0.27 points on the month and 2.24 points on the year. This month, the overall auto industry appeared stable-to-good. With high enthusiasm about production, the operating rate of enterprises increased month-on-month. However, some commercial vehicle companies temporarily suspended production due to funding problems. New orders for passenger cars continued to pick up this month, mainly due to sales promotion and local subsidies, which continuously increaseing downstream demand. Commercial vehicle market still appeared relatively flat. From the point of view of procurement, the purchase volume of enterprises this month increased amid rising orders. There were some replenishing demands from a few enterprises who believe that there will still be room for rising raw material prices.
The PMI for the shipbuilding sector stood at 50.69, up 0.50 point month-on-month, but down 0.67 point year-on-year. After seasonal adjustment, the composite index was 49.00, down 0.68 point MoM and 0.62 point YoY.
Shipbuilding enterprises were enthusiastic about production this month. Medium and large-scale enterprises were basically in full operation, while operations at small-scale enterprises were relatively poor. The volume of new orders also increased month-on-month. Orders at some large domestic shipping companies have been scheduled until after 2026-2028. New orders were mainly driven by clean energy power ships. In addition, the orders of cruise ships also increased significantly. Raw material prices inched higher, and shipbuilders restocked mostly as needed.
The PMI for home appliances sector stood at 50.89 in June, up 0.40 points month on month, but down 0.72 points year on year. The seasonally-adjusted composite index stood at 50.07, up 0.05 points on the month but down 0.87 points on the year. This month, the home appliances sector as a whole continued to improve. The production pace was relatively fast, and some enterprises continued to increase the production schedule of refrigeration products. New orders also increased on a monthly basis. Driven by the influence of dealer activities and consumption policies in various regions, downstream demand has picked up this month. With the increase in orders and the decline in raw material prices, the purchase of raw materials by home appliance enterprises has also increased.
The composite PMI for transport infrastructure industry in June 2023 stood at 50.52, up 0.39 points on the month and 0.06 points on the year. The seasonally-adjusted composite index stood at 49.65, an increase of 1.14 points MoM and 0.02 points YoY. Transport infrastructure companies improved this month. Notwithstanding a slow-down of the construction progress in some areas amid the impact of rainy weather, but players in the industry were enthusiastic about production. The number of new projects and labour force picked up on the month. Raw materials were mainly purchased according to project needs, and there were not much replenishing demands from the companies on insufficient funds.
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