Manufacturing warmer with rising steel prices

In November, the China Manufacturing Purchasing Managers Index (PMI) was 50.6%, up 0.4% from the previous month. The production index was 52.5%, up 0.4 percentage points from the previous month and above the critical point, indicating that manufacturing production maintained a growth trend and the growth rate continued to accelerate. At the same time, from the perspective of the industry, the production volume of the automotive industry, textile and apparel industry, wood processing and furniture manufacturing, and electrical machinery and equipment manufacturing industries continued to grow.

“The plate price increase is still closely related to the manufacturing industry.” Researcher said that since October, manufacturing-related indicators have improved, which also makes large steel mills are cautiously optimistic about the sheet metal market, “Plates are mainly used for home appliances, cars, Machinery, shipbuilding and other manufacturing industries, unlike construction steel, are seriously affected by the weather.” She predicted that Wuhan Iron and Steel, Anshan Iron and Steel, etc. will follow Baosteel to raise steel prices.

As for whether this means that the price of sheet metal has rebounded from the bottom to the rising channel, the researcher said it is still difficult to judge. “Although the manufacturing industry is showing signs of improvement, the demand is still weak. The overall plate growth rate before the Lunar New Year is not high, and there is more room for stabilization. As of next year, no one can accurately predict a trend. Too much. From the survey of dealers and the downstream, there are obvious differences in the outlook for businesses."

However, some analysts believe that Baosteel’s price increase has released a more positive signal. The research report released by Huatai Securities is optimistic about the strong driving role of the central government in pushing the new urbanization strategy for the steel market. At the same time taking into account the overall decline in social inventory since the second half of this year, while the new downstream industry after the Spring Festival is about to start intensive, do not rule out the steel industry will be phased to the good.