In May this year, the purchasing managers index (PMI) for the Chinese steel sector stood at 46.4 percent, down by 6.2 percentage points as compared to April, falling below 50 percent again, as announced by the China Steel Logistics Committee (CSLC), which is part of the China Federation of Logistics and Purchasing (CFLP).

In addition, in May the production index for the steel sector indicated a 7.6 percentage point month-on-month decrease to 45.4 percent. Meanwhile, in May the raw material inventory index for the sector decreased to 43.2 percent with a 2.8 percentage point month-on-month decrease, while the sub-index for new orders saw a sharp drop of 12 percentage points month on month to 45.8 percent.

In the given month, the finished steel inventory index increased to 58.6 percent, up 4.6 percentage points month on month, while the index for new export orders was at 51.6 percent, down by a slight margin of 0.5 percentage points month on month. In May, the purchase price index in the Chinese steel sector stood at 26.1 percent, seeing a significant drop of 20.0 percentage points month on month, the lowest level since September 2012. This index has been below 50 percent since the beginning of the current year, with the production costs of steel unable to provide sufficient support for finished steel prices.