China steel rebound in July
Sentiment in China's steel market rebounded strongly in July, with most market participants expecting steel prices to rise over the next month, according to the latest S&P Global Platts China Steel Sentiment Index (CSSI) for July, which showed a headline reading of 53.71 out of a possible 100 points.
The July index jumped 37.79 points from 15.92 in June, reaching a three-month high and again breaching the 50-point threshold. A reading above 50 indicates expectations of an increase/expansion and a reading below 50 indicates a decrease/contraction.
The outlook for new domestic orders for steel for the coming month improved by 38.34 points to 54.60, the strongest reading since April. Expectations for new export orders recovered from June's record low of 12.01 to reach 43.41 in July, but remain below the 50 threshold.
The biggest monthly improvements in the July index were seen in the outlook for both flat and long steel domestic prices. Price expectations for long steel products, such as rebar, jumped by 50 points from the month before to 62.50 in July. The price outlook for flat steel products, such as hot rolled coil, improved by 44.37 points to 62.70 in July.
The outlook for crude steel production in July edged up by 8.05 points to 41.38. Steel market participants expected steel inventories to soften by 2.72 points to 52.22 in July.
"We've seen a significant improvement in sentiment, largely the result of higher physical market prices that resulted from an improvement in futures prices on the back of expected output cuts in China's Hebei province this month," said Paul Bartholomew, senior managing editor of steel & raw materials for S&P Global Platts.
The CSSI is based on a survey of approximately 70 to 85 China-based market participants including traders and steel mills. Data is compiled by S&P Global Platts'