Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s factory activity growth has slowed for the 17 months due to higher costs of raw materials, maintenance of equipment, and unfavorable weather conditions affecting business activities. The official manufacturing purchasing manager’s index (PMI) in July inched down to 50.4 from 50.9 in June, according to the National Bureau of Statistics (NBS) released on Saturday. The country managed to maintain the figure above the 50-point mark that sets apart growth from contraction. The drop in growth reflected a decline in demand, an NBS official stated.


Raw-material costs’ sub-index for July was at 62.9 from 61.2 in June. A surge in raw-material cost impacted the profitability of industrial firms and dissuaded Chinese exporters from taking new orders.


Authorities are putting efforts to prevent passing on high factory-gate prices to the consumer, disturbing the economic situation caused by weak demand.


The construction index in July slipped to 57.5 from June’s 60.1 due to extreme weather.


People’s Bank of China (PBOC) lowered the reserve requirement ratio (RRR) for banks in mid-July to strengthen the slowing economy. The move released around CNY1 trillion ($154bn) in long-term liquidity.


Another survey showcased the official non-manufacturing purchasing manager’s index (PMI) slipped to 53.3 in July from 53.5 in June.



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