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Platts reports gloomy outlook for steel
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THE outlook for steel prices in China in July has slumped to a six-month low, while expectations for domestic orders have also deteriorated, according to the latest analysis from global commodity information provider Platts.
Platts’ China Steel Sentiment Index (Platts CSSI), reflecting hopes of market participants for the whole month, landed at 26.5 out of a possible 100 points in July. The reading fell 15.7 points from June’s 42.2 and was the weakest reading since the Chinese New Year holiday period in February.
A CSSI reading above 50 indicates an expansion, and one below 50 signals contraction.
The outlook for new domestic steel orders in July fell sharply for the second consecutive month to 26.4 from 43.2 in June, while hopes for export orders were flat from June at 28.3.
“Steel prices in China were in free-fall in June despite slightly stronger iron ore prices,” said Paul Bartholomew, Platts’ expert on steel and steel raw materials.
“Therefore, mills and traders are bearish about the prospects of any near-term price recovery, particularly as steel demand slows in the hotter summer months. Steel market participants anticipated higher steel production and inventories in July, which could add to the downward pressure on steel prices.”
The outlook for crude steel output in July rose to 50 from 44.4 in June, while the prospects for steel inventories held by traders increased 3.8 points from June to 42.4.
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