The May 2026 Steel Industry PMI (Purchasing Managers' Index) registered at 47.9%, down 1.3 percentage points month-on-month, marking the second consecutive month below the 50% threshold and indicating a cooling in steel industry activity.
Demand Side:Affected by the rainy season in southern China and high temperatures in the north, construction site activity has significantly weakened. The new orders index fell to 46.8%, and the new export orders index was 48.2%, both in contraction territory.
Supply Side:The production index was 48.7%, with steel mills actively controlling output in response to weakening demand. The finished product inventory index rose to 43%, indicating a slowdown in destocking.
Cost Pressure:Prices of key raw materials including iron ore, coke, and coking coal continued to rise, with the purchase price index surging by over 10 percentage points, squeezing steel mill margins.
Market Outlook:June is traditionally an off-season, and demand is expected to weaken further. However, cost-side support limits significant downside for steel prices, with the market expected to remain range-bound. Galaxy Futures projects rebar prices in the 3,130-3,180 yuan/ton range and HRC in the 3,350-3,400 yuan/ton range.
Original LinkοΌSina Finance
Pengcheng Steel