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Hebei's steel industry PMI falls in Aug.

Source:   Time:

Steel production in China is one of the pillar industries for the econ. Over the past months, the sector has suffered due to a sharp decline in demand both at home and abroad, which led to plummeting prices in the market.

According to China Iron and Steel Association data, the steel sector lost about 1.9 billion yuan, or about 300 million U.S. dollars, in July alone, and it's expecting an even bigger loss for August. On top of that, China steel futures fell to an all-time low on Tuesday. Hebei province, the biggest steel production region in China, launched its steel industry PMI for the first time in July.

It’s a tough time for Chinese steel producers. Inventories are on the rise. Prices are dropping. Under these pre-conditions, China’s northern Hebei province published its steel industry PMI for the second time. The index in August read 34.3, falling 6.9 from July.

Wang Dayong, general secretary of Hebei Metallurgy Industry Association, said,"With the on-going global economic crisis, the slowdown of domestic growth and the decrease of steel consumption, the index showed that the whole steel industry is in a state of contraction."

Among all its eleven subindices, the new order index fell the most. In August, it declined by 13.3 to 22.4, far below the 50 level which separates expansion from contraction.

Wang Dayong, general secretary of Hebei Metallurgy Industry Association, said,"The decline mainly reflected a weak demand from the downstream. It means that not only the demand in the steel industry is declining, but other industries’ demands are also falling, such as machinery, construction and ship manufacturing. "

        Not all the data has performed badly. The finished steel inventories decreased in August, which could ease some of the pressure that was put on the region’s producers. Meanwhile, Wang said that although the steel producers are facing big challenges right now, they can take it as an opportunity to improve their production technologies and strategies.

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