China's steel industry is back to life

After a sharp and sudden contraction in June, activity levels in July across China's steel industry - the largest in the world - are improving again. The purchasing managers' index (PMI) stood at 50.2 in July, well above 45.1 in June.

Also, the Manufacturing PMI measures changes in the levels of activity in China's steel industry from one month to the next. Anything above 50 is a signal for growth, while anything below this level is a signal for contraction.

According to the report, all indicators rose in July on the back of new export orders. Domestic orders also rebounded, rising to 50.5 from 43.3. Other indices measuring output, finished goods inventories and raw material inventories rose from levels seen in June.

According to the data, the PMI of the steel industry is a composite index that is weighted in the following order: new orders (30%), yield (25%), employment (20%), delivery times for suppliers (15%) and stocks (10%).

Following the July report, Chinese commodity futures soared again to stellar gains in recent trading. The most actively traded iron ore futures on the Dalian Commodities Exchange in September 2016 rose 1.71%, reflecting similar gains in coking coal and rebar futures by 2.04% and 1.15%, respectively.