China’s Steel Industry Rebounds as October Approaches

PMI Surge Signals Increased Activity and Demand Ahead of Peak Season

As October unfolds, China’s steel purchasing managers’ index (PMI) has jumped by 8.6 points to 49 in September, ending a three-month contraction and indicating renewed momentum in the steel sector, according to the China Steel Logistics Professionals Committee (CSLPC). While still shy of the 50-point mark, this improvement suggests a more optimistic outlook.

Steel production saw a significant uptick, with the production sub-index rising 19.9 points to 54.8, the highest level in four years. This increase is attributed to heightened demand and steel mills resuming operations after maintenance and voluntary production cuts.

September typically marks a peak in steel demand, and this year is no exception. The sub-index for new domestic orders climbed to 47.2, reflecting a strengthening demand, although it remains below the expansion threshold. Meanwhile, raw material purchase prices edged up to 27.7, still well under 50.

Additionally, China’s broader manufacturing PMI improved, now at 49.8, further supporting the positive trend in steel production. Analysts expect October to bring even more growth, fueled by favorable fiscal policies and easing restrictions in the housing market.

Looking forward, the CSLPC anticipates continued increases in steel production throughout October, driven by rising demand, low inventory levels, and profit potential. Raw material prices are expected to climb, while steel prices may see moderate increases as outdated rebar standards are phased out.