PMI File photo:VCG

Graphics: GT

China's manufacturing purchasing managers' index (PMI) fell slightly in June for the third consecutive month due to a weak recovery in demand and tight supply of raw materials such as coal, electricity and chips.

China's manufacturing PMI for June stood at 50.9 points, sliding 0.1 point from May, but remaining in expansion territory, the National Bureau of Statistics said on Wednesday. 

The June data showed that the production index slid 0.8 points from the previous month, as output at some enterprises was interrupted due to tight supplies of chips, coal and electricity. The manufacturing indexes of the oil refining and vehicle production sectors stayed in negative territory, according to the NBS.

A slowdown in global demand and volatile global supply chains contributed to the relatively weaker PMI data, Tian Yun, former vice director of the Beijing Economic Operation Association, told the Global Times on Wednesday.

"Global supply chains are recovering and their reliance on Chinese manufacturing has decreased. The decline of external demand reduced production," Tian said.

According to the NBS, the new export orders index remained at a low level of 48.1 points in June, down 0.2 points from the previous month, mainly due to a plunge in metal processing.

The new export orders index declined for a third consecutive month, and the growth rates of imports and exports in the second half of the year are likely to further weaken, Liu Xuezhi, a senior macroeconomic analyst at Bank of Communications, said in a note he sent to the Global Times on Wednesday.

In contrast to declining overseas orders, the domestic orders index climbed 0.2 points to 51.1 points, reflecting the sustained growth of market demand, a NBS official said. 

"With the recovering of the supply chain, it is expected that Chinese companies may have to focus on the domestic market in order to maintain growth momentum. China's fiscal policy may also shift to smooth the domestic economic cycle, said Tian.

According to the NBS, the pressure of industrial product prices generally eased in June after China took steps to stabilize commodity prices.

The average purchase price and the factory gate price for major raw materials dropped 11.6 and 9.2 points, respectively, from the previous month. Prices in the metal processing sector dropped significantly and fell into the contraction range, according to the NBS.

"It is likely that manufacturing companies' factory gate prices in June will rise slightly to the year's peak and then ease back," Liu said.