Chinese steel mill sentiment weakens

Wednesday 6 November 2013

Mac Bank’s useful Chinese steel mill sentiment survey is out today and shows ongoing firmish trends. Overall sentiment is down but still positive:

Orders are still expanding:

A majority of mills was still planning to expand iron ore inventories as well.

There is one warning sign, however. Even with the recent modest improvement in rebar prices, steel mill profitability is approaching levels associated with past destocking episodes:

It would be very late in the year to destock but nothing is impossible.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.