The Purchasing Managers' Index (PMI) in China's steel sector, an economic indicator for the industry, rose to 49.9 in June, marking the end of decline for three straight months, according to the latest data released by the China Steel Logistics Professionals Committee (CSLPC).

The figure was up 14.7 compared with the preceding month, indicating the activities in steel sector rebounded, data showed.

The index for production gained 22.4 month on month to 49.9 in June, with phased release of steel demand and the end of early blast furnace maintenance, but the release rate of steel supply remained relatively moderate.

Steel demand over the month witnessed a temporary release thanks to smooth macroeconomic recovery after two consecutive months of slowdown, steady progress of infrastructure construction and increases of market expectations for stable growth policies.

In addition, the production index snapped a seven-month streak above the new order index, which was registered at 51.5 in June, up 24.1 month on month, easing the supply and demand contradiction.

It is worth noting that the significant increase in new order index was based on the previously low index, while the actual steel demand still posted a less intense rebound.

Driven by expectations of stable growth and the phased release of steel demand, steel prices also rose in the month. By the end of June, prices declined slightly instead amid falling expectations affected by hot and rainy weather.

CSLPC expects steel demand under downside pressure in July, and weak demand expectation would restrain steel production enthusiasm and lead to falls in raw material prices. Steel prices may shock down.

(Writing by Riley Liang  Editing by Alex Guo)
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