NDRC: China's steel market strengthens in February

创建于02.25
China's steel market showed signs of improvement in February after a weak January, according to the National Development and Reform Commission (NDRC) in its latest survey of the steel sector, released on February 21. The survey covered major wholesale steel markets in South China, Shanghai, and Tianjin.
The survey assessed six key indices and revealed a rebound in both the Sales Price Expectation Index and the Purchase Price Expectation Index for February, signalling improved market sentiment across the sector after three consecutive months of declines.
 
The Sales Price Expectation Index surged to 69.1%, up by a hefty 41.2 percentage points from January, while the Purchase Price Expectation Index rose by 35.4 percentage points to 65.2% from the previous month.
 
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Industry sources observed that market sentiment had been under pressure for a quarter and is now poised for a strong rebound following the Chinese New Year (CNY) holiday, which ended on February 7, a belief the NDRC findings support.
 
Steel buying activity from end-users, such as fabricators and construction sites, is also expected to recover this month. "With downstream operations picking up after the Lantern Festival (February 12), demand for steel products is gradually improving," the NDRC noted.
 
The Sales Volume Expectation Index for February jumped to 54.8%, an increase of 39.2 percentage points from January, the survey showed.
 
However, stock levels are expected to rise further this month, although at a slower pace than in January. The NDRC's Inventory Expectation Index stood at 52.9%, down by 16 percentage points from the previous month.
 
Significantly, the inventory index remains above the 50% threshold, indicating that the stocks accumulated around the CNY holiday will require more time to be absorbed, given the slower-than-expected recovery in demand, Mysteel Global observed.
 
The report also pointed out that profit margins are likely to increase slightly, even though production costs are expected to rise this month. The Sales Cost Expectation Index surged to 66.2% for February, while the Sales Profit Margin Expectation Index rose to 50.5%, reflecting increases of 21.9 and 21.7 percentage points, respectively, from January.