Average offer prices for ex-China wire rod have edged up over the past week amid the prevailing optimistic sentiments among market players. As a result, most offers in Southeast Asia’s import market have also moved up. Nevertheless, some suppliers are still ready to deal at the previous levels, continuing to see slack demand in distant markets.
Offers for ex-China wire rod from second-tier mills have been heard at $530-550/mt FOB, moving up by $10/mt compared to August 31. “During the given week, iron ore prices have mostly moved up, bolstering wire rod prices from the cost side. Meanwhile, production outputs and inventories of wire rod in China have decreased, and so there is no sharp contrast between supply and demand. Moreover, China has issued stimulus policies to boost the real estate sector, exerting a positive impact on market sentiments, and production restrictions are expected to be implemented in the future, though currently not being strictly implemented yet, and market players feel cautiously optimistic towards the future prospects for the wire rod market,” a trader said.
The lowest offer prices from traders using non-VAT trading have been reported at $530/mt CFR, while last week they were at as low as $520-525/mt CFR. “A couple of small lots were sold below $520/mt CFR Manila early in the week, so now buyers are absent,” a local source said. Offer prices of private steelmakers in northern China have been heard at $535-545/mt CFR, but these were not mainstream supplies. The wire rod produced by the mainstream state-owned steelmakers was not heard to be in demand in Southeast Asia.
Offer prices of ex-Indonesia and ex-Malaysia wire rod have been heard at $525-535/mt, FOB, up by around $10/mt over the past week. However, some sources agree that $520/mt FOB is still achievable.
As of Thursday, September 7, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,795/mt ($527/mt), increasing by RMB 55/mt ($7.6/mt) or up 1.5 percent since August 31, while decreasing by 0.42 percent compared to the previous trading day (September 6).
$1 = RMB 7.1986