July steel PMI shows: steel supply and demand at both ends of the contraction industry operation continued to be sluggish
2022-09-28
According to the PMI of the steel industry surveyed and released by the China Federation of Iron and Steel Logistics Committee, it was 33.0 in July 2022, down 3.2 percentage points from the previous month, and the operation of the steel industry continued to be sluggish. From the perspective of sub-index changes, the off-season characteristics of the market appear, the market demand is running at a low level, the production of steel mills has declined, and the prices of steel and raw materials have continued to decline. It is expected that in August, market demand will pick up, and steel mill production tends to recover, leading to a slight rebound in steel and raw material prices.
In July, the domestic steel market demand low operation, recovery is relatively slow. A number of reasons lead to insufficient market demand. First, the high temperature and rainy weather continues, causing the steel market to enter the short-term seasonal off-season. Second, the investment situation of real estate mainly using steel is not optimistic, and the support for steel demand continues to weaken. From January to June, investment in real estate development fell by 5.4 year-on-year, and the area of new housing starts fell by 34.4. The real estate development boom index in June was 95.40, which is already below the theoretical critical point. The current decline in the domestic real estate industry is difficult to change in the short term, and continues to decline under the influence of supply and loan interruptions in some areas. Third, the international situation has become more severe and complex, with downward pressure on major economies increasing and external demand contracting. Combined, steel demand continued to contract in July, with the new order index at 25.9 per cent, unchanged from the previous month and below 30 per cent for two consecutive months. The index of new export orders was 39.4 per cent, down 7.7 percentage points from the previous month. The steel terminal market started slowly and market confidence was significantly insufficient. Judging from the monitored Shanghai terminal procurement data, the recovery of Shanghai terminal procurement in July was limited, far lower than the same period in previous years.
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