China Armco Metals: News Around the Industry

China's Manufacturing Sector Sees Slight Recovery

Source: SBB Daily Briefing Scrap & Raw Materials Edition - 2012-01-04


China's manufacturing sector recovered slightly in December as companies lifted purchases ahead of Chinese New Year, two surveys show. The headline manufacturing purchasing managers’ index (PMI), compiled by China's National Bureau of Statistics (NBS), rose by 1.3 points to reach 50.3 in December after falling to 49 in November, the lowest figure since March 2009.

NBS analyst for the PMI, Zhang Liqun, noted that China’s economic growth was unlikely to experience a sharp decline in 2012 as market fundamentals remain relatively sound. This is despite declining exports because of softer demand for Chinese goods in the US and Europe, and lower fixed asset investment, Steel Business Briefing understands.

However, HSBC's monthly PMI was less positive, showing that Chinese manufacturing continues to contract overall despite a slight improvement in December. HSBC reported a PMI of 48.7 in December, compared with 47.7 the previous month. The HSBC PMI is typically slightly lower than the official one, SBB notes.

Analysis of the NBS PMI shows the major contributors to the December recovery were new export orders, and higher production and inventories. In December, new domestic orders recovered by 2 points to 49.8, though ten of the 20 industrial sectors, including steel and non-ferrous mining and fabrication, were below 50.

Production grew overall by 2.5 points from November to 53.4, while new exports increased to 48.6 from 45.6 in November. The country’s sub-index for finished manufacturing goods inventories fell by 2.5 to 50.6 while the steel industry was at 50.