Regular reader will know that within China’s official PMI there is a partial PMI for steel. It’s out today and in August showed a mixed result but in total further signs of deterioration. The headline number was relatively unchanged showing modest weakness for the third month running at 48.4. Output was strong at 54.3, the best turnout this year. However new orders fell to 44.6, the lowest since February and signalling growing weakness in domestic markets. Export orders were some offset at 53.6 but are a much smaller component. Inventories of steel remained high and inventories of raw materials low:
The grey line is the problem and suggests weakness in domestic orders is weakening just as it should be growing on seasonality.