China’s manufacturing activity and steel demand in April extended the decline from March levels as widespread COVID-19 cases sent the country reeling, a development that would continue to keep the manufacturing sector under pressure in May.

          China’s manufacturing production index of steel consumption published by S&P Global Commodity Insights stood at 128 points in March, up 16 points on the month due to seasonal factors. However, the index was down by 18 points on the year, indicating the pandemic continues to weigh on the steel sector.

          Lockdown measures were extended to more Chinese cities in April compared to March, and the year-on-year decline in manufacturing activity and steel demand is expected to deepen in April.

          The production index is based on production data from China's National Bureau of Statistics for 17 steel-related manufactured goods, categorized into seven sectors and weighted according to their share of steel consumption. The monthly production average in 2018 is used as the baseline of 100.

          In March, only the production of shipbuilding and power generation facilities saw a year-on-year increase, while that of machineries, vehicles, home appliances, containers and railway facilities were all lower than a year earlier.