Chinese steel production still strong despite PMI miss

The latest data from CISA on 10-day average production showed very strong production rates to 20 September, rising close to 14%YoY compared to the same period last year.

The comps do get a little harder in the coming months and there is a the prospect of under reporting in November/December given the strength of production in the YTD and the ongoing government clamp downs on overcapacity in the sector.  But nonetheless, demand looks like it will be strong.

This is in contrast to the signal given by the latest round of PMIs, with the flash result revised down and the official number coming in a little lower than expected.

This isn't a disaster given August was quite a bit better than expected. But it does suggest that overall manufacturing is not doing as well as steel intensive sectors.  Perhaps this is to do with the external sector, although the leading indicators suggests exports throughout the Asian region should start rising soon.