China’s Steel PMI Drops in August Amid Weaker Demand

Steel Industry Faces Continued Contraction

China's steel purchasing managers' index (PMI) fell to 40.4 in August, a decline of 2.1 points from the previous month, signaling reduced activity in the steel sector. The decrease reflects ongoing challenges, including weaker steel demand and production cutbacks due to a new national rebar standard. The steel production sub-index dropped to 34.9, marking the third consecutive monthly decline. Additionally, the raw material purchase price index fell to 19.6, and new domestic orders sub-index decreased to 38.5.

The decline in steel PMI aligns with a broader slowdown in manufacturing, as China's official manufacturing PMI also fell to 49.1. However, expectations for a rebound in steel demand are optimistic for September as high temperatures and rain ease, potentially boosting production and stabilizing raw material prices.