China’s %Manufacturing sector returned to growth in October after contracting for five consecutive months, although steelmaking remains flat.
The National Bureau of Statistics in China attributed the manufacturing increase to recent economic stimulus measures that have been undertaken in the nation of 1.4 billion people.
However, the steel market showed no growth in October, although demand is expected to remain steady in the near-term, driven by automobile and home appliances.
According to the National Bureau of Statistics, China’s manufacturing industry purchasing manager index (PMI) increased to 50.1 points in October, up from 49.8 points in September.
A reading above 50 indicates expansion. Before October, the manufacturing PMI was in contraction for several months.
Encouragingly, new orders returned to expansion in October at 50 points, after contracting in the previous five months.
Analysts say that government subsidies for consumer good trade-ins have sparked a resumption in demand for cars and home appliances throughout China.
However, many analysts remain concerned about China’s exports of %Steel and steel-manufactured goods, which continue to be fragile.
The average Chinese domestic hot-rolled coiled steel price in October increased to Yuan 3,554/mt ($499 U.S. per metric ton), up 13% from the average seen in September.
However, the average price for hot-rolled steel in China was 6% lower year-over-year in October as the improvement in demand was modest.
