China Steel demand view stays dreary: Platts

Chinese steel market participants anticipate fresh orders to stay subdued over Jan, though they spot some improvement in cost ranges for both long and flat steel products, according to the newest Platts China Steel Sentiment Index (CSSI). The headline index for Jan. bordered gains 1.62 points from the month before to 24.45 out of a likely 100 points and was the 4^th successive month the reading has continued beneath the 50 threshold. A reading over 50 shows and increase/expansion and a reading lower 50 shows a lessen/reduction. The view for fresh export orders over the coming month enhanced by almost ten points compared to Dec. to 34.03, while prospects for fresh local orders were flat versus the month before at 23.62. 

Cost forecasts for flat steel products, such as hot rolled coil, improved by 38.34 points to 56.07 in Jan, and the cost view for long steel products, such as rebar, climb 71.53 points to 77.78. The view for crudesteel production in Jan. better by 18.33 points from the month before to 50.0, suggesting that market participants expected output to stay at a alike level to Dec.. Prospects for steel inventories held by Chinese traders improved 10.98 points from the month before to 55.92 in January.

This is usually a bad time of year going into Chinese New Year and the coldest winter months," clarify Bartholomew. "The worry is that steel inventory ranges would begin to rise over this time and put even more stress on rates next month. Mills may take the opportunity to conduct maintenance work but the market needs deeper capacity decreases to assist bear rates."

The CSSI is based on a review of about 60 to 75 China-based market participants including traders, stockists and steel mill operators. divide to the CSSI, the Dec. monthly average rate for Platts China export hot rolled coil rates was $259.8/mt free on board (FOB) China, drop 0.5 Per cent from $261.1/mt in Nov.