During the past week, China's domestic longs market recorded a significant drop due to the continuing slackness of demand in the downstream market. Domestic steel mills have issued new prices, mostly keeping wire rod prices unchanged, while making downward adjustments to rebar prices. The market is still characterized by overall weakness, and demand in some regions is expected to be negatively influenced by the rainfall season.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
6.5 mm | Q235 | 3,997 | 586 | -10 | |
20 mm | HRB 335 | 3,930 | 576 | -10 | |
20 mm | HRB 400 | 4,040 | 592 | -14 |
In China's three main steel markets, i.e., Shanghai, Beijing and Guangzhou, the prices of Q235 grade 6.5 mm high speed wire rod are respectively at RMB 4,000/mt ($587/mt), RMB 3,920/mt ($575/mt) and RMB 4,070/mt ($597/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,790/mt ($556/mt), RMB 4,020/mt ($589/mt) and RMB 3,980/mt ($584/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,820/mt ($560/mt), RMB 4,100/mt ($601/mt) and RMB 4,200/mt ($616/mt) in these respective markets. All prices include 17 percent VAT.
Most domestic steel mills announced new price policies. In general quotations of wire rod have remained stable, while prices of rebar have decreased further, down by RMB 100/mt ($15/mt). On June 11, Jiangsu Province-based steelmaker Shagang Group issued its long steel prices for mid-June. The producer kept its wire rod prices unchanged, with its ex-works price for Q235 6.5 mm high speed wire rod remaining at RMB 4,300/mt ($630/mt); at the same time, the steelmaker reduced its rebar prices by RMB 100/mt ($15/mt), with the new ex-works price of HRB 335 grade 14-25 mm rebar at RMB 3,950/mt ($579/mt), and with HRB 400 grade 14-25 mm rebar at the level of RMB 4,070/mt ($597/mt).
Prices of rebar are expected to drop further in the coming period. In spite of the decreases already seen, there has not been any obvious improvement in the number of deals being concluded. At present, eastern and southern China have entered the rainy season, which will affect construction activity in those regions. In addition, end-users are maintaining low stock levels, buying only the minimum quantities required to meet their needs. In this context, demand for rebar in the domestic market is likely to remain at low levels.