Chinese steel purchasing managers index (PMI) fell to 53.4% in August from 54.8% in July, down by 1.4%.

Hit by high temperature as well as rainstorms, construction activities was slow in August.
Steel mills reported the production has slowed down due to environmental protection and raw material price upsurge. The output sub-index was at 50.0%, down from 56.7% in July.

However, steel mills had a strong willingness to stock up. The raw material purchase volume index was 56.6%, up by 6.6%; the raw material import index was 54.5%, up by 2.3%.

The steel companies had increased cost pressures in August, and the purchase price index of raw materials was 61.7%, up by 5.5% at a relatively high level.

The index report pointed out that domestic steel prices rose steadily because bad weather in August. High cost of raw material and the expected peak season will come soon.