China steel production and PMIs remain contractionary

China's steel production rates and steel PMIs are in contractionary territory, having remained weak for most of 2015. While steel production is falling at the fastest pace since 2010, it is notable that the steel PMI has shown a sequential recovery in both July and August, with both the production and new orders component driving this move. 

China's steel PMI leads steel production rates by roughly one quarter, which in turn leads China's imports from Australia by one quarter. A stabilization or recovery in production rates could, at least temporarily, bode well for Australia's exports to China.