The outlook for new steel orders in China softened in April from the record high in March, but most market participants expect steel prices to continue rising over the month ahead, according to the latest Platts China Steel Sentiment Index (CSSI), which showed a headline reading of 69.12 out of a possible 100 points in April. The April index fell 20.30 points from March’s record 89.42, though it was the second-highest reading over the past twelve months. A reading above 50 indicates expectations of an increase/expansion and a reading below 50 indicates a decrease/contraction.

The outlook for new domestic orders for steel over the coming month dropped by 21.91 points from the previous month to 70.85 in April, while expectations for export orders edged down by 1.74 points to 49.18. Price expectations for long steel products, such as rebar, soared by 40 points from March to 90.00 in the latest index. The price outlook for flat steel products, such as hot rolled coil, improved by 7.37 points to 80.63.

The outlook for crude steel production in April rose 1.34 points from the month before to 60.71, the highest reading for expected steel output since the index began in May 2013. More participants expected steel inventories to fall this month, down 15.59 from March to 36.35 points in April.

 “Positive manufacturing data in March suggests underlying demand for flat steel is fairly robust in China and the price recovery for domestic hot rolled coil is not as sentiment-driven as some had feared,” said Paul Bartholomew, senior managing editor of steel & raw materials for Platts. “Warmer Spring weather in China has seen construction activity pick up again, hence the extremely buoyant price outlook for long steel. The strong focus on the domestic market should result in lower steel exports from China and help international steelmakers compete better in their own markets.”

Platts, Beijing