S&P Global Platts China Steel Sentiment Index Flat in November

New Order Outlook Subdued, Long Steel Prices Seen Rising

Beijing - November 21, 2017

Chinese steel market participants expect construction steel prices to rise over the next month as supply tightens due to the winter production cuts in key steelmaking regions, according to the latest S&P Global Platts China Steel Sentiment Index (CSSI), which showed a headline reading of 31.93 out of a possible 100 points.

The headline CSSI, which measures the outlook for new domestic and export steel orders, stayed flat on the month before, edging down 1.68 points from 33.61 in October.

A reading above 50 indicates expectations of an increase/expansion and a reading below 50 indicates a decrease/contraction.

The outlook for domestic steel orders in November dipped by 1.94 points to 32.36, while expectations for export orders rose by 1.34 points to 26.94.

Expectations for prices of long steel products, such as rebar used in construction, jumped by 50.00 points from the month before to 62.50, while expectations for flat steel prices fell by 31.67 points to 50.00 in November.

Market participants expected crude steel production to slow further in the month ahead, with the reading falling 9.38 points from October to an all-time low of 15.63 in November. Inventories held by traders were expected to ease further from the previous month, recording a 9.65 drop to 51.56 in November.


“China’s steel market is still coming to terms with the likely impact of winter production cuts on demand and prices. As well as lower output, construction activity will also slow for environmental reasons, so both supply and demand will be affected. Though the outlook for demand is fairly subdued, tighter supply should support long steel prices in the month ahead,” said Paul Bartholomew, senior managing editor of steel & raw materials for S&P Global Platts.

“More stringent environmental measures have also contributed to softer demand from the manufacturing sector, which is reflected in the weaker reading for flat steel prices in the latest index,” said Bartholomew.

The CSSI is based on a survey of 75 to 90 China-based market participants including traders and steel mills. Data is compiled by Dai Yuelin, Zhang Jing, Joy Zhuo, Lucy Tang and David He in Shanghai.

According to S&P Global Platts price assessments, separate to the CSSI, the Platts China export hot rolled coil price averaged $550.70 per metric ton (mt), free on board (FOB) China in October. This was down 4% on $575/mt FOB in September.

CSSI History

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