Steel industry PMI rose to 54.8% in May, achieved new highest level since May in last year

In 31st, May, the iron and steel logistics professional committee released the steel industry PMI index display, steel industry PMI was 54.8% in may up 5.7% compare with last month, which ended the previous two-fold and rebound to the new highest level since May, 2016.
It's understood that after the China steel price crash down in the "gold three silver four" consumer season, but in May to usher in a sharp rebound.
In early May, by the environmental protection and production capacity positive factors, the steel prices ushered in a sharp rally, the variety of price increases generally in the range of 100-200 RMB. In mid-May, the steel futures goods market price shows higher and higher trend, and the stock price is also increasing in different level.
The PMI index in May rose by 2% to 58.2% compared April, and the index rose to the highest level since May 2016. At the same time, production-related procurement activities also showed a significant expansion trend, the steel industry purchasing volume index in May rebounded to 55.0%, up 8.8% based on last month. The raw material import index rebounded to 53.7% , rose 7.2 % compared Last month. And the stocks of raw material inventory index rebounded 4.3 % to 50.2%.
Analysts pointed out that through the four sub-index changing situation, it shows that with the recent domestic steel prices continue to rise, steel mills continue to improve profits, and their enthusiasm also improved a lot, and the domestic steel production significantly increased and the latter part of the increase Kinetic energy will continue.
It is worthy to mention that in the steel industry PMI sub-index in May, the steel industry new export orders index fell slightly from 0.2%to 44.8%, this is in 50% of the contraction interval for six consecutive months. From this sub-index situation, the current domestic steel export orders is relatively difficult, and the later steel export may continue to decline.
Customs data show that China's exported 6.49 million tons steel in April, chain decreased by 1.07 million tons, down 14.2%, fell 28.5%. China exported 27.21 million tons from Jan- Apri, decreased 25.8%.
Analysts said infrastructure and real estate investment enhance growth and implement the strong expectations, the steel market demand is still fundamentals to improve, coupled with the current domestic steel market stock stay at a very low level, the steel prices are expected to continue to rise in short-term . However, both the current steel prices and mill's profits have been at a high level, the risk is also gradually increased, coupled with the current steel production is accelerating release and weather factors,etc, it is expected the domestic steel market will show high finishing and shock running trend.