This proved September to be the second consecutive month where the CSSI stayed above the 50 threshold, indicating expectations of an increase. As such, Chinese steel market participants expect new steel orders during September to stay at similar levels to last month, though prices could soften slightly.

New domestic steel orders increased 1.35 points to 58.33, while export order expectations for the month decreased 10.09 points to 24.48. Crude steel production is expected to stay relatively flat in September as compared with August, while steel inventories held by trades are expected to rise further in response to weak demand.

According the Paul Bartholomew, Platts managing editor of steel and steel raw materials, the general market sentiment is still extremely pessimistic as domestic steel prices are at record lows, and demand from manufacturing and property construction sectors have yet to improve.

One would typically expect a positive rebound for steel demand especially after the work stoppages around Beijing for the Victory Day parade and World Athletics Championship, but survey respondents did not envisage any significant improvement in the coming month, he added.