China steel PMI signals more pain

China’s May steel PMI is out shows a slight improvement on April. The headline number was up 1.7 points to 46.8 without output climbing 4.1 points to 49 and almost back into expansion after three moths of declines.

Both new orders and new export orders also fell at a slower pace with the former up 2 points to 45.2 and the latter up 5.3 points to 46.3.

Steel inventory is falling slowly at 49.4 points while raw materials are falling less quickly than last months’ breakneck pace at 44.5.

All in all, some improvement but not enough to signal better steel and ore prices yet.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.