Singapore — China’s steel purchasing managers’ index, or PMI, fell by 2.3 basis points from November to 43.1 in December due to weaker steel market conditions, according to data from index compiler CFLP Steel Logistics Professional Committee released Friday.

The December reading meant the average steel PMI in 2019 was 47.2 points, down 3.5 basis points from 2018.

The sub-index for steel production was 0.7 basis points higher on the month in December at 44.1, while the sub-index for raw materials prices increased by 0.6 basis points on the month to 47 in December, mainly driven by restocking before China’s Lunar New Year holiday.

The sub-index for new steel orders in December fell 7.6 basis points from the month before to 36.2 in December. The sub-index has been below the neutral threshold of 50 points for the past eight months, indicating ongoing weak steel demand in China.

The sub-index for steel inventories rose by 16.6 basis points from November to 43.7 in December.

Finished steel stocks as of December 20 dropped to 11.01 million mt, which was down 1.8% from early December and a 9.3% decrease on the year, according to the China Iron and Steel Association, or CISA.

Crude steel production at works operated by CISA members averaged 1.94 million mt/day over December 10-20, down by 1.4% compared to early December but 5.6% higher on the year. Stronger output on the year was mainly due to relaxed production cuts and healthier steel margins.

S&P Global Platts’ China domestic rebar mill margins averaged Yuan 496/mt ($71.2/mt) in December, down 10.7% compared to November, which was still considered a healthy level by mills.