SteelOrbis Shanghai Throughout the past week, the overall Chinese
rebar market saw a bearish commercial performance, low inventory and stable prices, with the
wire rod market also in a weak stable trend. On October 27, the average price of 20 mm diameter HRB 335
rebar in the three major Chinese markets - Shanghai, Beijing and Guangzhou - was down RMB 17/mt week on week ($2) to RMB 3,083/mt ($391), while that of 20 mm diameter HRB 400
rebar was at RMB 3,227/mt ($410). Meanwhile, the average price of 6.5 mm Q235 high speed
wire rod decreased RMB 4/mt ($1) to RMB 3,183/mt ($404). In spite of the continuous decrease in the long products market over the previous two weeks, Chinese
billet market prices still remained stable, and this restrained the
production growth of the rolling mills to a large extent. Furthermore, the reduction in
rebar inventory also supports the market prices in the short run. However,
semis producers have lately been eager to shift more
semis exports before the implementation of the new export tax policy begins. When it comes to November, however, semi finished steel exports will be curbed. Nevertheless, since many rolling mills in South East Asia purchase Chinese
billet, the new export tax policy will increase their
production costs. In comparison with the Southeast Asian mills, the price advantage of Chinese long products will be even more remarkable. Thus, the full impact of the new Chinese export tax policy on long products exports still remains uncertain. The report released by the State Statistics Bureau on October 24 indicated that in the first three quarters of this year, the total investment in newly-opened projects amounted to RMB 4.86 trillion, up 7.5 percent year on year and down 14.7 percentage points in growth compared with the figure for the first six months. This sharp decline in investment growth is evidence that macro-control measures are gradually taking effect, leading to a slip in domestic demand growth. Overall,
rebar may see some slight rebound while the sluggish performance in
wire rod is expected to continue.