China steel PMI picks up in Jan, a good start for steel sector

2018-01-31 13:18:00 General,  Viewpoint,  Steel Products sxcoal.com

The Purchasing Managers' Index (PMI) for China's steel sector rebounded to 50.9 in January from 50.2 in December, data from the China Federation of Logistics & Purchasing (CFLP) showed, holding for a ninth month above the 50-point mark that separates growth from contraction.


A sub-index for new orders continued declining to 55.8 in January from 58.3 a month ago, while New Export Orders bounced back sharply by 9.3 percentage points from December to 45.4. The change of the two indexes indicates domestic demand kept contracting but exports of the steel products improved dramatically.


"House building and other infrastructure constructions have generally stopped in the south in January, and building works in the south have been coming to an end," the CFLP said in a statement. "Demand kept shrinking as a whole this month."


Monitoring data showed full-month daily purchase of wire rebar in Shanghai market declined by 10.63% from December.


"Demand will remain poor in February. Few cargoes can be found in the market as most of mills won't go back to production from the Lunar New Year holiday," the CFLP said.


Spurred by price rallies in the overseas markets and cancellation of tentative tariffs of bar, rebar and wire, steel exports have picked up for two straight months from November.


Customs data showed exports steel products totaled 5.67 million tonnes in December, up 320,000 tonnes from a month ago.


The production index climbed to 51.9 from December's 46.1, going back to the expanded position after two months' contraction. Raw material purchasing index and raw material exporting index rose by 0.2 and 6.5 percentage points to 55.7 and 57.1, respectively.


Raw material stock index decreased 3.8 percentage points to 46.8 in January.


In 2017, China's production of crude steel, pig iron and steel products totaled 831.73 million, 710.76 million and 1,048.18 million tonnes, up 5.7%, 1.8% and 0.8% from a year ago, data showed from the National Bureau of Statistics.


Specifically in December, crude steel output rose 1.8% from a year ago to 67.05 million tonnes; pig iron stood at 54.72 million tonnes, down 4.4% on the year; steel products, 87.79 million tonnes, down 1.1%.


Data from China Iron and Steel Association (CISA) showed the daily crude steel production averaged 1.79 million tonnes at 101 nationwide key steel mills in the first ten days of January, up 0.44% from ten days ago; that averaged 1.78 million tonnes in ten days after, down 0.58%.


Inventories of finished goods rose for the first time since May to 55.9, up 7.6 percentage points from a month ago, the federation's data showed.


"Freezing rain and snow weather across many places of the country impacted transport and consumption of steel products and caused stocks piled up at mills," the federation said.


CISA said the social stocks of steel products totaled 8.18 million tonnes in January, 750,000 tonnes or 10.0% more than a month ago – 7.09 million tonnes at markets, up 10.1% MoM and 1.09 million tonnes at ports, up 9.7% MoM.

In January, domestic spot prices of steel products picked up before a slump in the early and middle of the month.


Eerier this month, price of rebar (HRB400 20mm) traded in Shanghai market continued the downside from December to the bottom of 3,760 yuan/t on January 15; prices have since then zigzagged up to 3,900 yuan/t on January 29.


The risks of high prices have diminished in the month and prices gained supports from the winter restocking activities, the CFLP said. "It's expected the prices to remain stable in the next month."


(Writing by Alex Guo   Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Editors Recommendations

1 Weekly China coal market news summary (Feb 11 –Feb 14) 2018-02-14

8th Global Coking Coal Resource & Market Summit to be held in Beijing mid Apr China's coking coal market regained strength in mid-2017 and hit a multi-year high in January 2018, backed by

2 China Jan power coal price index up 3.89% on month, NDRC 2018-02-14

China's monthly-issued price index of power coal stood at 549.12 yuan/t in January, up 12.93 yuan/t or 2.41% month on month and 20.58 yuan/t or 3.89% year on year, showed data from the National Develo

3 Wind energy installations continue to grow, WWEA 2018-02-13

The overall capacity of all wind turbines installed worldwide by the end of 2017 reached 539.291 GW, preliminary showed statistics from World Wind Energy Association (WWEA). A WWEA report

4 China wind power installation may slow down in 2018 2018-02-13

China is likely to install less wind power capacity in 2018 after a significant contraction last year, experts expected, which seems to be linked to a large slowdown in northern areas.

5 China will crack down on illegal coal mining in 2018, safety watchdog 2018-02-13

China will carry out “special action” in 2018 to crack down on illegal coal mining to ensure safe mine operations and reduce output capacity, the State Administration of Work Safety said in a statemen

6 China coastal coal freight rates down to multi-mth low 2018-02-13

Freight rates for shipping coal from northern China ports to the south suffered a sharper decline from the second half of last month, data showed from industry portal sxcoal.com. Historic

7 China Shenhua Jan commercial coal output down 3.5% YoY 2018-02-13

China Shenhua Energy Co., Ltd, the listed arm of newly-merged China Energy Investment Corporation, produced 24.6 million tonnes of commercial coal in January, dipping 3.5% year on year, the company an

8 Valin Steel swings to sharp profit in 2017; NISCO gains nine-fold margin 2018-02-13

Shenzhen-listed steelmaker Hunan Valin Steel Co., Ltd. made a large profit of 4.12 billion yuan attributable to shareholders in 2017, compared with a loss of 1.055 billion yuan a year ago, showed data

9 Weekly China met. coke market analysis and forecast 2018-02-13

China's met. coke market remained weak last week, with supply staying high and demand low, but some traders increased inquiries for hoarding purpose, boosting sentiment of coke producers. The

10 Spot thermal coal demand seen easing off in China before holiday 2018-02-12

Demand for spot thermal coal was seen shrinking in China just ahead of the Spring Festival, as many coastal utilities put generating units into maintenance following a slump of industrial power use.

Most Read Articles

1 Holiday Notice – Spring Festival 2018-02-14

Please kindly note that we will be on holiday from Thursday February 15 to Wednesday February 21 for the Spring Festival, the grandest holiday in China for family reunion. There will be n

2 Indian government takes steps to boost coal supplies to power plants 2018-02-14

In order to boost coal supplies to power plants, the government of India has decided on various steps including the use of dedicated rail transportation and setting up of power projects only within 50

3 China's import coal market shows signs of weakening on muted trades 2018-02-13

China's import thermal coal market showed signs of weakening after stabilizing for one week or so, as few Chinese utilities seek the material abroad after domestic power demand dropped significantly b

4 Weekly global coal market news summary (Feb 11 –Feb 14) 2018-02-14

China urges U.S. restraint on steel imports China has expressed concerns over excessive protectionism in the steel sector by the United States, and urged it to show restraint in a probe into ste

5 China coastal coal freight rates down to multi-mth low 2018-02-13

Freight rates for shipping coal from northern China ports to the south suffered a sharper decline from the second half of last month, data showed from industry portal sxcoal.com. Historic

6 China's thermal coal supply will be guaranteed during Lunar New Year, NDRC 2018-02-12

Thermal coal supply for electricity generation purpose will be guaranteed and power consumption won't be affected during the Lunar New Year holiday, China's top economic planner the National Develo

7 China Jan power coal price index up 3.89% on month, NDRC 2018-02-14

China's monthly-issued price index of power coal stood at 549.12 yuan/t in January, up 12.93 yuan/t or 2.41% month on month and 20.58 yuan/t or 3.89% year on year, showed data from the National Develo

8 China wind power installation may slow down in 2018 2018-02-13

China is likely to install less wind power capacity in 2018 after a significant contraction last year, experts expected, which seems to be linked to a large slowdown in northern areas.

9 China Coal Energy Jan commercial coal output down 7.1pct on yr 2018-02-14

China Coal Energy Co., Ltd, the listed arm of China National Coal Group, produced 6.11 million tonnes of commercial coal in January, down 7.1% year on year but up 10.29% month on month, said the com

10 China's natural gas demand soars to historic high in 2017 2018-02-12

China's natural gas consumption created a record high of 235.2 billion cubic meters (bcm) last year, with an increase of 17% or 34 bcm from a year ago, said the country's largest oil and gas producer