Business conditions at global steel users continued to deteriorate in January, latest PMI survey data revealed, led by a further reduction in new orders and falling job numbers.
Production levels rose for the fifth month running, though only marginally, alongside a renewed cut to input purchases.
Higher raw material prices meanwhile encouraged a modest rise in output charges.
The seasonally adjusted Global Steel Users Purchasing Managers Index (PMI) edged down slightly from 49.7 in December to 49.6 in January, pointing to a second successive deterioration in the health of the global steel-using industry.
The index fell to its lowest for five months, and signalled a marginal rate of decline.
On the positive side, production at global steel users expanded for the fifth month running in January, although the rate of growth slowed to a subdued pace overall.
Asian steel users reported a weaker rise in output since December, whereas US users saw a slight improvement.
Notably, European manufacturers using steel registered the softest downturn for nine months.
The slowdown in output growth came amid a further drop in new orders at global users of steel in January.
Moreover, the rate of decline quickened slightly from December to the sharpest for five months.
Respondents linked the fall in new business to lower customer demand.
Export sales also remained weak in January, with total new orders from abroad falling for the twenty-first month in a row and at a faster pace.
Asian users notably saw the first drop in export volumes since September 2019.
The decline in job numbers gathered pace at the start of the year, with firms relating this to lower new orders.
In fact, the rate of contraction was the quickest since August 2016.
Nevertheless, steel users lowered backlogs at a modest pace in January.
There was also a renewed, albeit slight, fall in input buying at global steel manufacturers.
Meanwhile, stocks of both purchases and finished goods continued to tighten.
The rate of input price inflation accelerated to a solid pace in the first month of the year, as firms saw a stronger rise in raw material prices, including steel.
As a result, output charges increased for the second consecutive month, with the modest uplift being the quickest since October 2018. ■