China's manufacturing PMI down to 49.3 in July

The purchasing managers' index (PMI) for China's manufacturing sector went down 0.4 percentage points from the previous month to 49.3 in July, according to the data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing on Thursday.

In July, extreme weather conditions like heatwaves, heavy rains, and floods hit many parts of the country, leading to slgguish market demand and a decline in the manufacturing sector's new order index.

However, manufacturing production continued to expand, with particularly strong momentum in new growth drivers. Both equipment manufacturing and high-tech manufacturing PMIs remained in expansion range. Notably, both production index and new orders index for industries of railway, shipbuilding, aerospace equipment, computer, communication, and electronic equipment manufacturing all stayed in expansion range, demonstrating active performance on both the production and demand sides.

"Due to the short-term factors, (PMI for manufacturing sector) declined to a certain extent, but the production remained in the expansion range. The equipment manufacturing industry and high-end manufacturing industry represent new growth driver industries, and their production and new order indexes remained in the expansion range, reflecting that the foundation of our high-quality economic growth is relatively stable," said He Hui, vice president of China Federation of Logistics and Purchasing.

It is noteworthy that the raw material inventory index and producer prices index rose apparently from the previous month, driven by commodity price hikes and other factors. Notably, the raw material inventory index entered expansion range for the first time since March, indicating an overall improvement in the manufacturing sector's price levels.

"By industry, the two indexes of petroleum, coal and other fuel processing, the smelting and pressing of ferrous metals industries all rebounded obviously, and the market prices of related industries improved," said Huo Lihui, director of business climate survey division of Service Survey Center of the National Bureau of Statistics.

China's non-manufacturing PMI registered 50.1 in July, slightly down from 50.5 in June but remaining in expansion range. The sector was buoyed by robust summer consumption, with strong performance in retail, tourism, and recreational activities.

China's manufacturing PMI down to 49.3 in July

The International Energy Agency (IEA) has recommended a release of 400 million barrels of oil from stockpiles, the largest such move in IEA history, Executive Director Fatih Birol said on Wednesday.

The 32 IEA member countries unanimously agreed to make available 400 million barrels of oil from their emergency reserves to the market, Birol said at a press conference.

The release would take place over a timeframe appropriate to the national circumstances of each member country, he added.

Birol said the IEA secretariat will provide further details of how this collective action will be implemented in due course, and the agency will continue to closely monitor global oil and gas markets.

IEA members hold emergency stockpiles of over 1.2 billion barrels, with a further 600 million barrels of industry stocks held under government obligation.

The conflict in the Middle East has impeded oil flows through the Strait of Hormuz, with export volumes of crude and refined products falling to less than 10 percent of pre-conflict levels, according to the IEA.

The move to release emergency oil reserves came ahead of an online meeting of the Group of Seven (G7) leaders, scheduled later in the day, to discuss the economic consequences of the conflict between the United States, Israel and Iran.

The G7 energy ministers, under the French presidency, met via videoconference on Tuesday against a backdrop of heightened volatility in oil prices. On Monday, the price for Brent crude, the international benchmark, briefly climbed to around 119 U.S. dollars per barrel, its highest level since mid-2022.

In a statement released earlier on Wednesday, the ministers said that in principle they support the implementation of proactive measures to address the situation, including the use of strategic reserves.

IEA members agree to release emergency oil reserves amid Mideast turmoil