Average offer prices for ex-China wire rod have edged down over the past week as sentiments have fallen following the drop in futures prices due to heavy rainfalls, which impacted steel consumption and prices in the local market. Moreover, Chinese traders have resumed their aggressive offerings to the Southeast Asia.
Offers for ex-China wire rod from small and medium mills have been heard at $540-550/mt FOB, edging down by $5/mt compared to July 27. There have been some reports of sales to South America at $550/mt FOB Tianjin or slightly above, but they were from big mills, according to sources.
“During the given week, demand for wire rod in the local market slackened given the severe floods which hit northern China, while inventory levels increased, though outputs saw certain decreases as producers were required to control their outputs. The rainy weather in northern China will likely continue, and so the negative impact on construction activities will also continue and will drag down wire rod prices,” a trader said.
Offer prices for wire rod produced by mills in northern China have been heard at $560-570/mt CFR the Philippines, while buyers have been unwilling to accept this price level. At the same time, traders, who can offer non-VAT sales, have cut their offers from $550/mt CFR and higher last week to $540/mt CFR and some small deals have been done to the Philippines at this level.
ASEAN-based mills have been offering wire rod mainly not below $535/mt FOB this week. They have increased offers after selling some volumes to distant markets and Southeast Asia at $525/mt FOB last week, which translates to $545/mt CFR Thailand.