The Caixin/S&P Global manufacturing purchasing managers' index (PMI) fell to 49.5 in April from 50.0 the previous month, missing expectations of 50.3 in a Reuters poll and marking the first contraction since January.
This came after the official manufacturing PMI unexpectedly declined to 49.2 from 51.9 in March, according to data from the National Bureau of Statistics on Sunday.
The steel PMI fell for a second straight month to 45 in April, indicating a slowdown in the sector, CFLP Steel Logistics Professional Committee said on Sunday.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) traded 1.05% lower at 707.5 yuan ($102.64) a tonne, as of 0210 GMT, following a month-on-month drop of 13% in April. The benchmark June iron ore on the Singapore Exchange was 1.21% lower at $100.05 a tonne, as of 0208 GMT after having fallen by near 18% in the past month. The other steelmaking ingredients coking coal slipped 3.54% and coke fell 2.28%. "Hopes that China's reopening and the building season from April to June would boost steel consumption have faded," analysts at National Australia Bank said in a note. Rebar on the Shanghai Futures Exchange dipped 0.43% to 3,667 yuan a tonne, hot-rolled coil lost 0.64%, and wire rod slid 1.06%.
"Downstream demand (for steel products) has proved to be weak by the end of April, and steel inventories are likely to pile up again in the rainy season (in Southern China) which will cap (steel) demand," analysts at Sinosteel said in a note.
"Though steel output fell after some mills implemented equipment maintenance, supply remained sufficient and the reduction in output is still not enough to make a big difference in the current prices," they added. Stainless steel gained 1.12%. ($1 = 6.8930 Chinese yuan) (Reporting by Amy Lv and Dominique Patton in Beijing; editing by Uttaresh Venkateshwaran)
