Global steel-using sector flags steepest downturn since May 2020
S&P Global 's steel user PMI flagged a steep decline but iron ore miners just don't seem to care.
Source: iStock
Mentioned
KEY POINTS
- The US, Asia and Europe all posted declines in output and new orders
- New orders fell for a fourth straight month and at the strongest rate of decline since May 2020
- ASX-listed iron ore miners have posted strong gains and still standing tall
The Global Steel Users Purchasing Managers Index (PMI) deteriorated from 49.7 in October to 47.6 in November. The 50-point market separates expansion from contraction.
The indicator is designed to provide "an accurate overview of operating conditions at manufacturers identified as heavy users of steel."
A closer look
"Output in the global steel-using sector fell for the fourth month running in November, and at the fastest rate since May," S&P Global said in a report.
By region
Asia posted its sharpest decline for a second time in three months
US registered its steepest fall since May 2020
Europe posted its ninth successive contraction, but at the slowest rate over the time period
Price and cost
Supply chain pressure increased slightly but below pandemic era trends
Input price inflation was little-changed from October's four month high but below long-run series
Demand
New orders fell for a fourth consecutive month and at the strongest rate since May 2020
Volume of outstanding business rose in November after the first decline in over two years in September
Asia is driving all of the volume increase
Volumes in the US fell at the fastest pace since June 2020
Europe posted a fifth straight decline in outstanding volume
Iron ore miners just don't care
Even against the backdrop of deteriorating steel-making conditions and demand, iron ore spot prices have rallied hard on optimism around China's reopening.
"Iron ore has traded more like a financial asset than a physical commodity due to the influence of bullish forward-looking investment flow," Citi analysts said in a note on Monday.
This has driven some rather powerful rallies for heavyweights BHP, Rio Tinto and Fortescue.
But as share price performance diverges from steel-making business conditions, who's leading who?
Data as at 1:00 pm AEDT
