Platts China Steel Sentiment Index Fell to 10-Month Low in December

Onset of winter exacerbated difficult market conditions

Dec 07, 2015, 07:30 ET from Platts

BEIJING, Dec. 7, 2015 /PRNewswire/ -- Platts China Steel Sentiment Index (CSSI) fell to a 10-month low in December due to a significant deterioration in the outlook for new domestic steel orders.

The headline index for December fell 8.89 points from the month before to 22.83 out of a possible 100 points and was the second-weakest reading in 2015. A reading above 50 indicates an increase/expansion and a reading below 50 indicates a decrease/contraction.

The outlook for new export orders over the coming month was flat on November at 24.06 points, while expectations for new domestic orders dropped 9.66 points from November to just 22.72.

Price expectations for flat steel products, such as hot rolled coil, weakened by 14.65 points to 17.74 in December, but the price outlook for long steel products, such as rebar, plunged by 25 points to just 6.25.

"Steel market conditions in China continue to deteriorate and weak domestic demand has been exacerbated by the onset of cold winter weather, which heralds a slowdown in construction activity," said Paul Bartholomew, Platts managing editor, steel & steel raw materials.

Platts China Steel Sentiment Index – December 2015
(a figure over 50 indicates expectations of an increase; under 50 indicates a decrease)


December 2015

Change from November (points)

CSSI (Total New Orders)

22.83

-8.89

New Domestic Orders

22.72

-9.66

New Export Orders

24.06

0.04

Steel Production

31.67

-10.93

Flat steel prices

17.74

-14.65

Long steel prices

6.25

-25.00

Inventory held by traders

44.94

0.64

The outlook for crude steel production in December fell 10.93 points from the month before to 31.67, also a 10-month low. Expectations for trader inventories of 44.94 in December were at a similar level to the month before.

"Chinese mills appear to be reaching the end of their ability to make deeper cuts to prices, particularly for exports, as they are already incurring serious financial losses. They now seem to be contemplating trimming steel output instead, which is reflected in the weaker outlook for steel production," Bartholomew said.

The CSSI is based on a survey of approximately 60 to 75 China-based market participants including traders, stockists and steel mill operators.

Separate to the CSSI, the November monthly average price for Platts China export hot rolled coil prices was $261.16/mt FOB China, down 3% from $268.15/mt in October.

The Platts China Steel Sentiment Index survey plays no role in Platts' formal price assessment processes. For more information, please visit:

http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/steel.pdf

CONTACT
Media Contact:
Global, Americas, Asia: Kathleen Tanzy, + 1 917 331 4607, kathleen.tanzy@platts.com 

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets.  Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency.  Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets.  A division of McGraw Hill Financial, Platts is based in London with more than 1000 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include Standard & Poor's Ratings Services, S&P Capital IQ and SNL, S&P Dow Jones Indices, Platts, CRISIL and J.D. Power. The Company has approximately 20,000 employees in 31 countries. Additional information is available at www.mhfi.com.

SOURCE Platts



RELATED LINKS

http://www.platts.com