January 14, 2016 - 2:00 AM EST
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Platts China Steel Sentiment Index Remains at Low Level in January

Demand outlook indicates recent price improvement may not last

BEIJING, Jan. 14, 2016 /PRNewswire/ -- Chinese steel market participants expect new orders to remain subdued over January, though they see some improvement in price levels for both long and flat steel products, according to the latest Platts China Steel Sentiment Index (CSSI).

The headline index for January edged up 1.62 points from the month before to 24.45 out of a possible 100 points and was the fourth-consecutive month the reading has stayed below the 50 threshold. 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 improved by almost 10 points compared to December to 34.03, while expectations for new domestic orders were flat versus the month before at 23.62.

Price expectations for flat steel products, such as hot rolled coil, rebounded by 38.34 points to 56.07 in January, and the price outlook for long steel products, such as rebar, soared 71.53 points to 77.78.

"The index results indicate a disconnect between expectations for new steel orders and the outlook for price levels," said Paul Bartholomew, Platts senior managing editor, steel & raw materials. "Market participants are more upbeat about prices since they began to improve from mid-December, but they are less confident about domestic and overseas demand."

Platts China Steel Sentiment Index – January 2016
(a figure over 50 indicates expectations of an increase; under 50 indicates a decrease)

January 2016

Change from December

CSSI (Total New Orders)



New Domestic Orders



New Export Orders



Steel Production



Flat steel prices



Long steel prices



Inventory held by traders



The outlook for crude steel production in January improved by 18.33 points from the month before to 50.0, indicating that market participants expected output to stay at a similar level to December. Expectations for steel inventories held by Chinese traders rose 10.98 points from the month before to 55.92 in January.

This is normally a weak time of year going into Chinese New Year and the coldest winter months," explained Bartholomew. "The concern is that steel inventory levels will start to climb over this period and put even more pressure on prices next month. Mills may take the opportunity to conduct maintenance work but the market needs deeper capacity reductions to help support prices."

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 December monthly average price for Platts China export hot rolled coil prices was $259.8/mt free on board (FOB) China, down 0.5% from $261.1/mt in November.

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

Global, Americas, Asia: Kathleen Tanzy, + 1 917 331 4607, [email protected]

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 (NYSE: MHFI), 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.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/platts-china-steel-sentiment-index-remains-at-low-level-in-january-300204362.html


Source: PR Newswire (January 14, 2016 - 2:00 AM EST)

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