August 31, 2018 / 2:27 AM / 2 months ago

Chinese steel output levels off in Aug but export orders rebound: PMI

A worker walks past rolls of steel wires at a factory in Nantong, Jiangsu province, China July 3, 2018. REUTERS/Stringer

BEIJING (Reuters) - Growth in China’s booming steel industry slowed in August, with output leveling off despite a sharp rebound in export orders, industry data showed on Friday.

China’s steel purchasing managers’ index, or PMI, fell to 53.4 in August from 54.8 in July, according to index compiler CFLP Steel Logistics Professional Committee. Levels above 50 indicate expansion on a monthly basis, while anything below points to a contraction in activity.

A reading on new steel export orders suggested a solid bounce after a contraction in July. The sub-index rose to 53.2 from 43.3 the previous month.

But mills reported no increase in output levels, and appeared to be drawing on inventories to meet the upsurge in demand.

The output sub-index was neutral at 50.0, down from 56.7 in July.

Growth in China’s manufacturing sector as a whole unexpectedly picked up in August after a two-month slide, an official survey showed, offering some cushion for the slowing economy as the United States rapidly ratchets up tariffs on Chinese goods.

The respite may prove brief, however. Export orders shrank for a third straight month, suggesting a flurry of punitive U.S. trade measures are starting to bite even as Washington prepares more sweeping measures that it could trigger next month.

China’s biggest listed steel producer, Baoshan Iron & Steel Co Ltd expects to reduce exports to the United States in the second half this year but will keep total exports stable, a company executive said in at an investor briefing on Tuesday.

Reporting by Elias Glenn; Writing by Kim Coghill

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