Platts, Beijing

Platts China Steel Sentiment Index showed continued deterioration for November

The Platts China Steel Sentiment Index (CSSI) weakened slightly for November, with steel market participants expecting fewer new domestic and export orders in the month ahead, according to Platts, a leading global energy, metals and commodities information provider. The headline index for November fell 3.75 points from the month before to 31.71 out of a possible 100 points and was the weakest reading since July. A CSSI reading above 50 indicates an increase/expansion and a reading below 50 indicates a decrease/contraction. It was the second consecutive month the CSSI was below the 50 point threshold, indicating the market continues to contract.

Price expectations for flat steel products, such as hot rolled coil, improved from last month, rising 21.67 points to 32.39. But the outlook for prices of long steel products, such as rebar used in construction, dropped 6.25 points in November to 31.25.

The outlook for steel exports – which have been a major outlet for Chinese steel over the past two years – was just 24.02 in November, down from October’s 28.27 and the weakest reading since February. Crude steel production was expected to stay at a similar level to October, while steel inventories held by traders were tipped to decrease, the CSSI found.

“The index indicates a slow end to a lackluster year in China’s steel market with few signs of any pick-up ahead of winter,” said Paul Bartholomew, Platts managing editor, steel & steel raw materials. “Market participants are concerned about the export outlet drying up, either because of a lack of demand from overseas, or because low prices will make exports increasingly uneconomic.”

“Steel inventory levels have been high but traders expect stocks to start falling over the next month, mainly due to some production cuts at mills rather than due to a lift in demand,” Bartholomew said.

Platts, Beijing