The Purchasing Managers' Index (PMI) for the steel sector in China's leading steel-making province Hebei rebounded by 4.3 percentage points (pps) month on month to 50.4 in January 2024, data from the province's Metallurgical Industry Association showed.

In January, the new order index stood at 51.2, up 12.2 pps month on month, mainly increased purchases from the downstream sector, improved sentiment and climbed ferrous futures prices, which were bolstered by a series of favorable macro-economic stimulus.

The new export order index was at 43.2, unchanged on the month, dented by the lack of momentum in overseas economic recovery and higher global shipping rates pushed up by the Red Sea crisis.

The production index was at 47.6, felling 2.4 pps month on month. The production enthusiasm of steel mills has been dampened by low profitability and even losses, and environmental checks.

At the same time, the inventory index for finished steel in Hebei reached 57.3, up 7.3 pps from a month ago in January, while the ex-factory price index for finished steel dropped 6.6 pps month on month to 69.

The inventory index for raw materials decreased 3.7 pps on the month to 44. More steel mills initiatively conducted facility overhaul and only purchased raw materials on a need-to basis due to widespread losses and a lack of demand.

And the purchase index for raw materials slumped 39.4 pps from the month prior to 53.6%.

(Writing by Rebecca Liu  Editing by Harry Huo)
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