The amount exceeded market expectations and was put right down to an enchancment in home demand and robust exports, with metal product shipments rising to 9.63 million tons in Could, up 4.5% from April and 15.2% from the identical month a yr earlier.
For the primary 5 months of the yr China produced 438.61 million tons of metal, down 1.4% from the identical interval final yr.
Nonetheless, the tempo of the decline in year-on-year metal output has lessened, on condition that within the first 4 months of the yr manufacturing was down 3.0% on the identical interval in 2023.
It’s too early to say that China’s metal output and demand has turned a nook, particularly when the constructive image painted by the Could information was instantly countered by weak point within the property and industrial sectors.
Property funding in China slid 10.1% within the first 5 months of 2024 from the identical interval in 2023, accelerating from the 9.8% drop within the January-April interval, statistics bureau information confirmed.
Compounding the woes within the property sector, information additionally confirmed new house costs falling on the quickest tempo in additional than 9-1/2 years in Could, dropping 0.7% from April and marking the eleventh consecutive month-to-month decline.
It’s not simply the property sector that’s struggling, with industrial output rising 5.6% in Could, slowing from the 6.7% tempo in April and failing to satisfy expectations for a achieve of 6.0% in a Reuters ballot of analysts.
The important thing manufacturing index additionally declined in Could, dropping to 49.5 from 50.4 in April, beneath the 50-mark separating progress from contraction and lacking analysts’ forecast of fifty.4.
Stimulus enhance coming?
The weak point in property and manufacturing information comes regardless of Beijing’s efforts to stimulate the sectors and rebuild confidence by means of measures similar to easing mortgage guidelines.
It’s probably that these steps will take time to work their method by means of the system, and in the event that they do bear fruit it will likely be extra of a second half story.
Which means that enhancements within the metal sector are presently being pushed by expectations of an enchancment, reasonably than the fact of sturdy demand progress.
Iron ore, the important thing metal uncooked materials, can also be treading water because the market awaits convincing indicators of higher occasions forward in China, which buys about 75% of world seaborne volumes.
Iron ore futures on the Singapore Alternate ended at $106.55 a ton on Monday, down from $107.46 on the earlier shut, however nonetheless above the low from final week of $105.38 on June 11.
Iron ore costs have trended downwards to this point in 2024 after hitting a peak of $143.60 on Jan. 3, besides, they’ve held above $100 a ton other than a one-day foray to $98.36 on April 4.
The value has been supported by sturdy iron ore imports, that are up 7.0% within the first 5 months of the yr to 513.75 million tons.
Nonetheless, a lot of the achieve in iron ore imports has gone into replenishing port stockpiles , which have risen from a seven-year low of 104.9 million tons in October to a 26-month excessive of 146.6 million within the week to June 14.
The present dynamic of China shopping for extra iron ore than it wants for metal manufacturing might have continued in June, with imports set to stay sturdy.
China is on monitor to import a minimum of 99.87 million tons of iron ore in June, in line with information compiled by commodity analysts Kpler.
This determine is predicted to rise earlier than the top of the month as extra cargoes are assessed as more likely to arrive and discharge.
(The opinions expressed listed below are these of the writer, Clyde Russell, a columnist for Reuters.)
(Modifying by Miral Fahmy)