Activity in China's steel industry expanded in August at the fastest pace since April 2016, industry data showed on Thursday, reflecting high levels of production and low inventory.
The Purchasing Managers' Index (PMI) for the steel sector rose to 57.2 in August from 54.9 in July, data from the China Federation of Logistics & Purchasing (CFLP) showed, holding for a fourth month above the 50-point mark that separates growth from contraction.
The production index rose to 61.7 from 58.1 in July, expanding for the seventh consecutive month, while the new orders index rose to 66.6 from 63.1 in July. The new export orders index dropped to 45 from 49.8, reflecting higher prices at home.
"We expect domestic steel production and sales to remain strong in September, with market prices remaining elevated," the CFLP said. Inventories of finished goods remained below the 50-point mark, but edged up to 42.1 from 41.6 in July. Steel futures prices have risen about 9.2 percent so far this month.