China's Purchasing Managers' Index (PMI) for the steel industry rebounded to 47.9 in April, marking a 3.7 percentage point increase from the previous month, according to the official index compiler - the CFLP Steel Logistics Professional Committee (CSLPC).
The uptick suggests a modest recovery in the country's steel sector this month, with improved steel demand, steady production by steelmakers, and rising prices of both raw materials and finished steel products, CSLPC reported.

Downstream demand in China's steel market recovered somewhat in April, driven by progress in infrastructure construction and better market expectations buoyed by the government's latest plan to facilitate large-scale equipment renewals and trade-ins of consumer goods, the committee said.

The sub-index for new steel orders rose further by 3 percentage points to 47.4, reflecting warmer demand from the domestic construction sector and growing overseas demand, as per the CSLPC.

For China's steel production, the sub-index jumped by 12 percentage points from March to record 49.7 in April, though it remained below the 50-threshold marking growth, the committee noted. Daily crude steel output among member mills of the China Iron and Steel Association (CISA) saw a marginal increase of 0.33% from early April to average 2.12 million tonnes per day over April 11-20, according to CSLPC, citing CISA data.

Meanwhile, the sub-index for steelmaking raw material procurement prices surged by 33.5 percentage points to 55.9 in April, driven mainly by the quick rises in prices of iron ore and scrap.

Looking ahead to May, CSLPC cautioned that domestic steel production may continue to rise, potentially dampening supply-demand dynamics as domestic demand is likely to weaken a bit. The committee also suggested a downward trend in raw material and finished steel prices.