According to Hebei Metallurgical Industry Association, the steel purchasing managers’ index for China’s Hebei province fell 0.4 basis points in August 2019 from the previous month to 47 points, the fourth consecutive monthly drop, indicating the underlying softness of China’s steel market. The sub-index for new orders in August dropped by 3.6 basis points on the month to 44.2 as most end-users adopted a wait-and-see approach to purchasing, meaning steel sales were lower than expected. The sub-index for steel output was up 5.1 points on month to 49.1, while the sub-index for finished steel stocks rose by 1.7 points to 48.2. Inventories climbed due to strong steel production and weak demand. It said “Overall spot prices of domestic steel showed a downward trend and industry profits remain at a low level. The reasons for this include intensified trade tensions, the lack of downstream demand and the weakening of cost support. Market supply still exceeded demand, which would continue to put pressure on steel prices.”
Hebei is the largest steelmaking region in the world, accounting for almost a quarter of the world’s steel production.
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