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The steel PMI is out today from China’s NBS and it might have to consider discontinuing it again:
| PMI | Output | New Orders | New export orders | |
| Feb-14 | 39.9 | 35.2 | 32.4 | 52.3 |
| Mar-14 | 44.2 | 39.7 | 46.1 | 48.6 |
| Apr-14 | 52.6 | 53 | 57.8 | 52.1 |
| May-14 | 46.4 | 45.4 | 45.8 | 51.6 |
| Jun-14 | 48.3 | 48.9 | 50.7 | 55.7 |
| Jul-14 | 48.6 | 50.7 | 49.1 | 48.2 |
| Aug-14 | 48.4 | 54.3 | 44.6 | 53.2 |
| Sep-14 | 43.6 | 45.9 | 38 | 51.7 |
| Oct-14 | 46 | 42.2 | 47.4 | 54.9 |
| Nov-14 | 43.3 | 38.6 | 40.2 | 49.5 |
| Dec-14 | 44.1 | 43.6 | 40.2 | 41.6 |
| Jan-15 | 43 | 41.5 | 34.2 | 35.6 |
| Feb-15 | 45.1 | 41.5 | 43.4 | 43.4 |
| Mar-15 | 43 | 39.2 | 45.3 | 44.1 |
| Apr-15 | 48.2 | 49.4 | 49.4 | 40 |
| May-15 | 42.4 | 40.7 | 37.6 | 43.7 |
| Jun-15 | 37.4 | 34.2 | 27.9 | 50.7 |
And the chart:
This is an extremely volatile index and I would recommend taking it with a grain of salt. But that domestic new orders number is an absolute shocker and suggests firmly that steel mills are going to have to have to pull in production very shortly if not already meaning the relatively low iron ore inventories are about to rise in terms of days of consumption even before we get to any restocking. The firm export number is relatively much smaller than local consumption.
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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.