China Steel Index Rises to 64.4 in May as FX Inflows Surge and Nuclear Construction Advances

The Quick Take

• China's Steel Operations Prosperity Index (SOPI) rose to 64.4 in May 2026, up 1.9 points month-on-month, signaling a steady recovery in Chinese steel industry conditions.
• China's banks settled a net 2,447 billion RMB in FX transactions in May 2026, with foreign investors remaining net buyers of domestic stocks and bonds, per SAFE data.
• CGN's Fujian Ningde Nuclear Power Plant Unit 5 completed its dome installation milestone, advancing one of China's Hualong-1 reactor units from civil construction to equipment installation phase.

Three significant Chinese economic data releases on June 15 paint a picture of cautious sectoral recovery. China's metallurgical industry research institute reported the Steel Operations Prosperity Index (SOPI) at 64.4 for May 2026, a 1.9-point month-on-month increase that marks the fourth consecutive monthly improvement. The reading above 50 indicates expanding conditions in the sector and reverses the contraction signals that persisted through much of 2025. Improved steel industry performance is a leading indicator for Chinese construction activity and infrastructure investment momentum in the coming months.

Separately, China's State Administration of Foreign Exchange (SAFE) released May 2026 bank foreign exchange settlement data showing 16,676 billion RMB in bank settlements and 14,229 billion RMB in bank sales, a net positive indicating sustained inward FX flows. SAFE confirmed that foreign investors remained net buyers of domestic Chinese stocks and bonds in May, a trend that has supported the RMB and provided incremental liquidity to onshore capital markets. The continued net buying of Chinese domestic securities by offshore investors contrasts with earlier 2025 outflow episodes and suggests a stabilization in foreign portfolio interest in China's financial markets.

The Fujian Ningde nuclear dome milestone represents another advancement in China's Hualong-1 reactor construction program, the domestically developed pressurized water reactor that forms the backbone of China's nuclear expansion ambitions. The successful dome installation at Unit 5 moves the project from heavy civil construction into equipment installation, a phase that typically takes 3-4 years before grid connection. Nuclear power additions are strategically important for China's energy transition targets and reduce dependence on coal-fired generation that currently supplies approximately 55% of China's electricity. The macro variable across all three developments is China's GDP trajectory — sustained growth above 5% is required to maintain steel demand and support the FX inflow momentum.

Synthesized from 3 sources.