The Purchasing Managers' Index (PMI) in China's steel sector, an economic indicator for the industry, fell to 45 in April, marking the second straight month of decline after returning to expansion territory in February for the first time since May 2020, according to the latest data released by the China Steel Logistics Professionals Committee (CSLPC).

The figure was down notably by 3.4 compared with the preceding month, indicating the activities in the sector remained at the contraction zone and the downside speed accelerated, data showed.

The index for production declined 4.6 month on month to 47.2 in April, snapping a five-straight-month increase, due to lower-than-expected demand from the end users.

However, the production index was still higher than new order index, which was registered at 39.9 in April, slumping by 10.3 month on month.

The new order index fell to contraction territory again after fourth straight months of recovery, mainly affected by the continued weak demand in the real estate sector, slowed infrastructure activities and decline in auto sales.

CSLPC expects steel demand to dip in May, and weak demand expectation coupled with high inventory and thin profit would continue to restrain steel production enthusiasm. Steel prices may still face downside pressure.

(Writing by Emma Yang  Editing by Harry Huo)
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