[ferro-alloys.com]China's two leading manufacturing purchasing managers' indices, or PMIs, were both in growth territory in May, potentially ensuring that China remains a target for exports of hot-rolled coil in the near term, market sources said June 1.

The PMI published by the National Bureau of Statistics softened slightly to 50.6 points in May from 50.8 in April, while the May PMI released by Chinese media company Caixin strengthened to 50.7 from 49.4 in April. A PMI reading above 50 indicates expansion and below it, contraction.

The NBS' sub-index for manufacturing production was a healthy 53.2, while the new orders sub-index was 50.9. Both NBS and Caixin reported extremely low new export orders in May, though there are signs that global supply chains are starting to recover.

"Supply chains stabilized in May following severe disruptions in prior months due to restrictions related to the COVID-19 pandemic. However, there were still reports of stock shortages at some vendors," Caixin said in its report released on June 1.

China's strong domestic steel market has been in stark contrast to most other steel markets around the globe, which remain in varying stages of lockdown. India's manufacturing PMI for May improved to 30.8 from a 15-year low of 27.4 in April, but the sector remains in severe contraction at a time when Indian steel companies are starting to lift capacity utilization levels.

As a result, Indian, and also Russian steel companies, have been targeting China with HRC exports. Along with Vietnam, China is the only steel market in Asia currently where there is any notable demand.

China's domestic HRC mill margins averaged $36.27/mt in May, up from $11.28/mt in April and the strongest monthly average since January, S&P Global Platts data showed.

Southeast Asian HRC import prices stood at $428/mt CFR May 29, lower than China's domestic HRC prices at Yuan 3,600 ($503.24/mt), Platts data showed.

(S&P Global Platts)

• [Editor:王可]