Girdle of impasse seems to be tightening on the Chinese economy. Hitherto China has been at the epicenter of revival in global economy but the unusual silence witnessed over the past couple of months has set the grapevine agog about an imminent misfortune besetting an otherwise spectacular performance.

Piqued at this sudden change of dynamics at the hasting close on the heels of collapsing US and European economy the market found recluse in circumspection. Peak of seasonality yet to come initial signals are evidently discouraging with cracks appearing in the domestic levels after a long ambiguity. Remarkably this is happening at a time when the demand fundamentals were perfectly aligned for a long cherished revival after a gap of nearly 6 months.

Fitch Ratings warned last week that it might downgrade the credit rating of China within two years. Chinese local currency debt rating could face a downgrade over the next 12 to 24 months. With the expectation of severe deterioration in bank asset quality the downgrading seems imminent.

More so the steel mills left with escalating inventory as the market remains unresponsive will be left ruing about the over optimism in unleashing production hike even before the market had come to terms with the changing realities after the US downgrading and EU debt crisis.

A streak of cynicism prevalent all through seems to be gaining credence with each passing day of silence. The mystery though thickening would unravel in no time once the last straw of seasonal demand is lost. With the first week of September ending in wash out the future seems gloomy.

Silhouetted against a morale busting backdrop the task of market revival seems onerous with each passing day. Pinning hopes on the next coincidence after the failure of the previous seems to be the obvious recourse in this dreary milieu.

The Chinese Long Product Price Index CLPPI has gone down by 22 points last week whereas the Chinese Flat Products Index CFPPI has gone down by 1 point. The overall price index CHISPI declined by 10 points.

CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index

Long Products

PI - Product Index

Flat Products

PI - Product Index

To know more about these indices please visit
http://steelprices-china.com/spi_services/spi.html

1. Long products

Billets
150*150
Q235

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

WRC
6.5mm
Common

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

Rebars
20mm
HRB 400

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

Angle
#5

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

Channel
#16

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

Beam
#25

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

2. Flats products

HRC
4.75mm
Common

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

Plates
20mm
Common

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

Pig Iron
Z18-22
Foundry

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

HR Strip
183*2.75

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne

CR
1.0mm
Common

Change is on Sep 9th as compared to 2nd Sep 2011
Change is per tonne