China’s manufacturing sector grows at fastest rate in 10 years in Nov, steel inventories tighten


Melbourne —
’s manufacturing sector grew at the fastest rate in a decade in November, latest data showed Dec. 1, with companies reporting difficulties in sourcing materials including steel — suggesting rising steel prices have further to climb, though this may be limited as manufacturers note their margins were being squeezed.

China’s headline manufacturing purchasing managers’ index rose to 54.9 points in November from 53.6 in October, according to Chinese media company Caixin on Dec. 1

This follows the release of the National Bureau of Statistics’ PMI on Nov. 30 at a three-year high of 52.1 for November, up from 51.4 for October.

The Caixin PMI mostly tracks smaller and privately-owned manufacturers, while the NBS PMI looks at larger, state-owned entities.

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In its report for November, Caixin said stronger new orders were mainly coming from domestic customers, though export orders also improved for the fourth consecutive month.

Sales and production hit decade highs in November as China’s roared back from the impact of the , manufacturers noted.

As a result, they had to significantly step up their purchasing of inputs and noted delivery times had lengthened due to low at suppliers. Metals prices were specifically mentioned as rising quickly and companies were unable to pass on the full cost impact to their customers, according to the Caixin report.

Steel have been falling rapidly in China in recent weeks due mainly to strong downstream . China Iron & Steel Association data showed total stocks of major steel products in 20 Chinese cities fell almost 13% in the space of 10 days to 8.75 million mt on Nov. 20.

Demand from key downstream segments such as automotive, white goods and appliances, and have all improved as China’s economy has recovered.

This has supported prices of hot-rolled coil – the major steel product used in manufacturing – which reached Yuan 4,225/mt ($642/mt) Nov.30, up from Yuan 3,980/mt at the start of the month, S&P Global Platts data shows.

HRC margins averaged $30/mt in October before surging to $62.04/mt on Nov. 30, according to Platts data.


Paul Bartholomew


Wendy Wells



Source: Platts


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