Platts China steel sentiment index back in negative territory in May

A majority of Chinese steel market participants believe prices will likely fall over the next month due to weaker domestic demand, with the outlook for construction steel particularly bleak, according to the latest S&P Global Platts China Steel Sentiment Index (CSSI), which showed a headline reading of 46.98 out of a possible 100 points in May.

The May index dropped 22.14 points from 69.12 in April, recording the weakest reading since February – and is now 42.44 points below March’s record of 89.42. 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 for the coming month fell by 23.65 points from the previous month to 47.20 in May, while expectations for export orders edged down by 4.74 points to 44.44.

Price expectations for long steel products, such as rebar, slumped by 60.0 points from April to 30.0 in May. The price outlook for flat steel products, such as hot rolled coil, fell 39.20 points to 41.43 in May.

The outlook for crude steel production in May dropped 3.57 points from the prior month to 57.14. Steel market participants expected steel inventories to start climbing again this month, with the reading for this measure rising 31.23 points from April to 67.58 in May.

The CSSI is based on a survey of approximately 70 to 85 China-based market participants including traders and steel mills. Data is compiled by S&P Global Platts’ Shanghai steel team.

S&P Global Platts China Steel Sentiment Index – May 2016
(a figure over 50 indicates expectations of an increase; under 50 indicates a decrease)

May 2016 Change from April (points)
CSSI (Total New Orders) 46.98 -22.14
New Domestic Orders 47.20 -23.65
New Export Orders 44.44 -4.74
Steel Production 57.14 -3.57
Flat steel prices 41.43 -39.20
Long steel prices 30.00 -60.00
Inventory held by traders 67.58 31.23

 

 

 

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