Mining steel PMI fell sharply, Hebei iron and steel PMI rebounded slightly 
In mid 2014 1 production of iron and steel industry PMI fell sharply to 40.7, the five consecutive month in the line ups and downs. From the sub indicators, the production index, new orders index, export orders index fell significantly, the domestic steel production and business activities slowed down. January 2014 Hebei iron and steel industry PMI rebounded slightly to 48.20, but still in the contraction range. 
Festive atmosphere, off-season industry fundamentals continued weakness 
At the end of January 2014 the festival atmosphere, downstream of the site have shut down, leave the rest terminal procurement in succession, steel demand is weak. At the end of the steel overhaul, environmental pressures and other factors, the steel production capacity is inhibited. Due to the impact of shrinking demand side is greater than the supply side, the industry fundamentals continue weak. 
Supply side, in January 2014 PMI steel production fell sharply to 35.30, for the four consecutive month to reduce. This shows that steel mills continue to cut production, and the trend of production cuts in December last year, a substantial increase. The demand side, January 2014 steel PMI new orders index fell sharply, while the new export orders index also dropped significantly, showing steel city were apparent in terms of domestic and external demand atrophy. 
In January 2014 the steel raw material inventory PMI index dropped significantly, the steel reinforcing material inventory has ended, after the steel production capacity put or expected to be released, inventory of raw materials will continue to fall. And in January the production / new orders index continued to rise, the demand is relatively weak production, product inventories are expected to continue to rise. 
Maintain industry "hold" rating, optimistic about the oil and gas pipeline company 
January 2014 PMI absolute decline in the steel industry, the steel industry as a whole weak trend. From the supply side, the off-season and reduce the number of blast furnace maintenance effects fade or will make the steel production capacity put to be released; from the demand side, the absolute value of PMI steel in January 2014 new orders fell sharply, the new export orders index also fell sharply, steel city shows are shrinking in terms of domestic and external demand, and at the beginning of February to the Spring Festival holiday. Steel demand will be close to stagnation, or demand will be restarted at the end of February. 
The fundamentals of the industry in February will remain weak, environmental progress in the elimination of backward production capacity remains to be seen, the industry temporary lack of overall investment opportunities, and maintain a hold rating, relatively optimistic about the oil and gas pipeline company, Hebei leading steel enterprises may benefit from the elimination of production capacity. Relatively optimistic: ERON shares, Jiuli, Jinzhou pipeline, Xinxing Ductile iron pipes, Hebei iron and steel.