Mixed news yesterday from China’s last batch of major economic data for May even though crude steel production hit an all time high in the month.
China’s retail sales, investment growth and industrial output monthly figures came in below market forecasts in May, but were still solid.
Retail sales growth was the weakest of the lot – growing by annual 8.5% in May, down from the 9.4% rate in April and well short of the market forecast of 9.6%. That was the weakest reading since 2003 for retail sales.
With inflation steady and no other reason for the fall, it seems Chinese consumers slowed their spending in May.
Total fixed-asset investment growth slowed to 6.1%, compared to a 7% in April and a similar sized forecast. It continues the weakening trend apparent in this area for the year so far.
Industrial output rose 6.8% in May, down from 7% in April and a forecast of 6.9%.
And yet Chinese steel production in may rose both from a year ago and from April to reach near record levels on a daily basis.
The National Bureau of Statistics said the country’s steel makers produced 81.13 million tonnes of crude steel last month, up 5.8% from the previous month and 8.9% from May last year. It was a record monthly production figure.
Daily average output rose 2.4% to 2.62 million tonnes in May from April, according to Reuters. May has one more day than April.
And stocks of steel products held at Chinese mills and by traders both declined in May despite the increasing output, indicating that actual demand was still solid.
Year-to-date steel output rose 5.4% from a year earlier to 369.86 million tonnes.
Output of coke, a steelmaking raw material, fell 1.6% in May to 36.48 million tonnes from the same month last year following safety and environmental problems in some producing areas.
Investment in the private sector — accounting for around 60% of total investment — grew at an annual pace of 8.1% in the first five months of the year, down from 8.4% between January to April.
Investment in the property sector jumped 10.2% from a year earlier, down fractionally from the 10.3% annual pace seen in the first four months of the year.
So far this year, property sales by floor area grew by 2.9% compared to the same period in 2017.
Mining output increased by 3.0% over the year, outpaced by growth of 6.6% and 12.2% respectively for manufactured goods and the production and supply of electricity, thermal power, gas and water.
Retail sales also whiffed, growing by 8.5% over the year, down from 9.4% in April.
Later today, the US government will finalise a list of up to $US50 billion in Chinese imports that will be subject to 25% tariffs. They could start immediately.
