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In October China PMI in iron and steel industry continued to decline in the final value of 39.7

Release time: 2015-12-12
Browsing times: 29

In 2015 October Chinese PMI in iron and steel industry was 39.7, a decline of 2.4 percentage points, eighteen consecutive months below the line ups and downs. From the sub indicators point of view, in addition to the finished product factory price index, supplier delivery time index, foreign raw materials purchasing volume index rose, the rest of the index have varying degrees of decline. The output index, finished products inventory index, new orders index, new export orders index, raw materials purchasing price index fell show that by the end of the market has to inventory cycle and is currently in both supply and demand pattern of weak, accompanied by the drop in the prices of raw materials is expected to strongly, the late materials will continue to face "cost collapses" worries. From this point of view, in November the steel industry downturn China is still hard to get rid of mud, bear market pattern will continue.

Figure 1, Mysteel China Iron and steel industry PMI index

Figure two, PMI China Iron and steel industry Mysteel sub indicators

First, the production of steel enterprises enthusiasm is low, the plant significantly reduce inventory

In October steel output index decreased, 3.1 percentage points decline, final 39.9; and October finished products inventory index was 41.5, annulus comparing fell 4.0 percentage points. In construction steel and hot-rolled varieties as an example, according to Mysteel data shows, end on October 23, the screw thread steel production capacity for this year million tons, production line number 305, actual start number 241, operating rate was 79.0%, relatively flat last week, compared with last month fell 3.3%; week actual yield 322.05 million tons of weeks of 70.6% of yield, increased by 0.7 percentage points compared to the previous week, compared with last month fell 3.9 percentage points. 139 of the country's construction steel production enterprises rebar Inventory 2 million 987 thousand and 100 tons, 255 thousand and 200 tons less than last week, week less than 7.87%, less than last month 120 thousand and 900 tons, a decrease of 3.89% months. Wire week capacity of 224.42 million tons, production line number 169, actual start number 135, the week started rate 79.9% than last week increased by 3.0%, relatively on the month dropped 1.2 percentage points; week actual yield to 148.10 million tons, Zhou Da yield 66.0%, than last week increased 2.9 percentage points, 2.6 percentage points lower than last month. The total wire 691 thousand and 700 tons, 177 thousand and 900 tons less than last week, week were reduced by 16.62%, compared with the previous month increased 9 thousand and 100 tons, an increase of 5.22% months. Week week Mysteel this week monitoring of 37 of hot-rolled plates volume production enterprises a total of 64 production line actual start number 63, the overall operating rate was 98.44%, unchanged from last week; the steel mills of the yield was 81.99%, compared with last week by 0.74%; by the blast furnace or rolling line maintenance and influence of the average daily production of 2.19 million tons, than last week increased by 0.93 million tons; for unsaturated production and influence of average daily production of 814 million tons, compared with last week fell by 0.5 million tons; this week steel factory production was 329.09 million tons than last week reduced 298 tons, a decline of 0.90%; the steel factory inventories 96.47 million tons, compared with last week to reduce 2.53 million tons, a decline of 2.56%. This week's hot commodity volume total about 239.23 million tons, less than last week of 1.65 million tons; total internal feeding about for 89.96 million tons, less than last week by 1.33 million tons. Through the above data is not difficult to find, month the chain construction steel and varieties of hot-rolled production rate were decreased, that mills to bear long time the pain of loss, did increase the limit discontinued efforts, but the rapid decline in prices of raw materials production profit maneuvers a certain space, some varieties yield up to appear lows. Therefore, in November the overall supply of low pressure, but there may be a slow rise.     

Figure three, steel production enterprise output index

Figure four, steel finished product inventory index

Two, the contradiction between supply and demand of raw materials is still facing downside risks

October raw material purchasing price index 29.8, a substantial decline of 11.6 percentage points. Has been reduced by the steel mills, overhaul the scope of the impact of the expansion of raw materials prices in October unilateral fall. According to Mysteel data show: by the end of October 30, and MyIpic iron ore comprehensive index is 62.0, mom last month fell 6.20%; coke index was 66.74, last month fell 2.78%. Mysteel data show that statistics on the 30th the 41 major iron ore port inventory full aperture statistics for 84.45 million tons, Friday increased 58 million tons, compared with the Tuesday increased to 128 million tons, the total daily port of 248 million tons / day. The fourth quarter is still outside the mine to port peak, in September 2015 China imported 86 million 120 thousand tons of iron ore, a substantial increase in the previous month 12 million tons, an increase of 1.69%, the monthly import volume hit a new high for the year. Even if earnings losses, the four major international mining third quarter shipments are still showing growth without exception. Vale in the third quarter of the iron ore production 88.2 million tons, the company ever highest single season yield; quarterly Li Tuosan iron ore production over the same period increased significantly between 12% and 86.1 million metric tons, compared with the previous quarter, an increase of 8%; BHP in the third quarter iron ore production in the same period last year, an increase of 7% up to 61 million tons, an increase of 2% compared with the previous quarter; FMG group, three quarter iron ore output for 45.1 million tons, an increase of 5%, growth of 7%. Outside the mine high shipments and steel low blast furnace operating rate to form bright contrast, raw materials supply and demand situation continues to deteriorate, but blast furnace operating rate has been close to the last point, continued to decline more difficult, raw materials fell sharply reduces the likelihood is expected in November raw materials to the weak fall mainly.



Figure five, raw materials purchasing price index

  Three, the real estate industry downturn does not change, the demand for a collective decline

October, the new orders index 34.1, the chain dropped 2.9 percentage points, still in the below the line ups and downs, indicates that the terminal demand is still low in the operation. Real estate: Land 1-9 in the national real estate development and investment growth, real estate development enterprises to purchase an area of over 1-8 months were down slightly; real estate development enterprises housing construction area, real estate sales increased compared to 1-7 months, in August the real estate boom index for 93.40 months, the chain fell 0.06 points; infrastructure April: 1-9 infrastructure investments (excluding electricity) grew 18.1%, the growth rate down 0.3 percentage points compared to 1-8 months; in the second industry, electricity, heat, gas and water production and supply industry investment as the representative of the infrastructure investment growth of 15.7%, the growth rate down 1.4 percentage points; manufacturing investment growth: 8.3% 1-9 July manufacturing industry, the growth rate down 0.6 percentage points; in September, more than the size of the manufacturing sector grew 6.7%, 0.1 percentage points lower than in August. Demand to the three categories of indicators of real estate, construction, manufacturing industry data were to fall, the real estate business reinvestment will obviously insufficient infrastructure by funding constraints, manufacturing industry due to the meager profits does not see improvement tardy and the three quarter GDP "7" was 6.9%, superposition of demand in the coming season especially northern seasonal demand decline, November can hardly be optimistic about the demand situation as a whole, the level of demand will more than 10 month fall.    

Figure six, new orders index

Four, the international iron and steel situation can hardly be optimistic about the domestic exports will increase the difficulty

In October, the new export orders index 43.3, 1.2 percentage points lower than the ring, still below the line ups and downs. Customs data show that in the first three quarters of 2015, China's import and export value of yuan, down 7.9% over the same period last year. Among them, the export 10 trillion and 240 billion yuan, down 1.8%; imports 7 trillion and 630 billion yuan, down 15.1%; trade surplus 2 trillion and 610 billion yuan, expanded 82.1%. In September 2015, China's steel exports 11 million 250 thousand tons, up 1 million 520 thousand tons, an increase of 32%, the monthly export volume record; 1-9 months of total exports of steel 83 million 110 thousand tons, an increase of 27.2%. In September China's steel imports 1 million 10 thousand tons, down 10 thousand tons, down 25.7%; China's 1-9 month accumulative total imports of 9 million 730 thousand tons of steel, down 11.6%. From the point of view of the data, although in September of steel exports hit a record high, but overall export environment is still hardly turnaround, the downturn in the international steel market demand does not change and an important exporter of China's anti-dumping measures will increase the difficulty of domestic exports, coupled with the end of RMB compared to early appreciation is expected to November export growth will decline, the overall level of exports more than 10 month decreased.

Figure seven, new export orders index

Five, the downward pressure on the domestic economy, steady growth continued to upgrade

1, the economic growth rate of 7, downward pressure increased

Since the beginning of this year, China's economy is facing downward pressure on the larger, fixed investment, real estate development investment, social consumption growth continued to fall, coupled with the recent international and domestic financial situation turbulence, three quarters of China's economic growth rate fall. On the National Bureau of statistics released data, the three quarter of China's GDP growth of 6.9%, down second percentage points from the 0.1 quarter growth rate, the Department for the first time since the second quarter of 2009 fell below 7%. At the same time in September, China's industrial added value of above scale real growth of 5.7%, down 0.4 percentage points over August. September, the total electricity consumption of 456 billion 300 million kwh, down 0.2%.

From the investment point of view, the situation is not ideal, 1-9 months, the national fixed asset investment grew by 10.3% year on year, the growth rate down 0.6 percentage points over 1-8 months. 1-9 months, the national real estate development investment grew 2.6%, the growth rate down 0.9 percentage points over 1-8 months.

From the export point of view, the first three quarters of the import and export value of yuan, down 7.9% over the same period last year. Among them, the export of one billion yuan, down 1.8%; imports of yuan, down 15.1%; trade surplus of $, expanding by 82.1%. Although the third quarter export growth continued to fall, but the monthly export decline narrowed. One quarter of exports increased by two, 4.8% quarter, three quarter exports fell by 3% and 5.6% respectively, but in July, August, September fell 9.5%, respectively, 6.1% and 1.1%.

2, the steady growth policy overweight, fiscal and monetary policy under the double

Recent macroeconomic data display fundamentals remain weak, the steady growth policy more force to overweight, the central bank to cut interest rates RRR, approved infrastructure projects, such as measures to occur frequently. 12 the people's Bank of extension of credit assets mortgage refinancing pilot, in the early stage of Shandong, Guangdong to carry out credit assets as collateral to loan pilot formation based on the experience can be replicated, decided in Shanghai, Tianjin, Liaoning, Jiangsu, Hubei, Sichuan, Shaanxi, Beijing, Chongqing and other nine provinces (city) to promote the pilot. 15 development and Reform Commission approved 8 infrastructure projects, including 5 railway projects, 1 waterway regulation projects and 2 railway projects, with a total investment of. 24, the central bank announced Shuangjiang again, and let go of the deposit interest rate floating ceiling, which is since the beginning of this year, the cut interest rates five times, the third time Shuangjiang.

At the same time the central bank has repeatedly reverse repurchase operations in the open market, in October the cumulative net return of funds 100 billion yuan, in order to drive the market to maintain a loose market funds face.

3, iron and steel industry to continue to adjust the structure

In recent years, the iron and steel industry overcapacity serious optimization has been much concern, the elimination of backward production capacity, industrial upgrading, environmental protection and other implementation of the transformation of iron and steel further increase. At the same time in the bank credit limit, the situation of the industry loss, the iron and steel industry funds become increasingly tense, the phenomenon of money from private enterprises slowly spread to some of the state-owned enterprises, the central enterprises. On the 19th of this month, steel shares announcement said, deferred payment size of 20 billion yuan of "10 steel debt" the interest, becoming the first occurrence of bond defaults steel central enterprises. Although since last year, the central bank to cut interest rates several times, but in general, the role of the steel industry is limited, the transformation of the industrial structure is imminent.

Overall, real estate, infrastructure, manufacturing data collective decline, the domestic economic downward pressure is still, and into the consumer off-season, the level of demand will continue to decline. In addition, the international situation is not changed, the export is difficult to increase, the domestic steel industry is still facing some pressure. But from the point of view of the iron and steel industry itself, lasting loss of industry, steel production efforts to expand, the factory and the stock market is low, and the elimination of backward production capacity, the upgrading of the industrial structure, steel environmental transformation have intensified their efforts to implement, inhibit the release of the industry capacity will extent offset the demand decreased the negative impact. It is expected in November domestic steel price decline is limited, the overall presentation of the shock consolidation trend.

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