Chinese steel demand booming or breaking?

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Yesterday we saw a strong rebound in the China steel PMI via MySteel:

China’s Purchasing Managers’ Index (PMI) for the steel industry returned to the expansion zone, scoring 51.5 after a strong month-on-month growth of 5.9 basis points or a recovery for the second month after struggling in the contraction range over November-December 2018, amid better-than-expected demand but lower output, according to the latest release by the official index compiler – CFLP Steel Logistics Professional Committee (CSLPC) on January 31.

In January, among all the sub-indices, that for new orders rose substantially by 13.9 basis points on month to 53.4, and that for new exports reversed up to by 8.3 basis points to 44.1 after having declining for the previous two months, as domestic demand fared better than expected because of a warmer winter so far and contractor’s rushing for project completion ahead of the Chinese New Year holiday that falls on early February in 2019, according to CSLPC.

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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.