Further slight fall in local Chinese longs prices, more positive hopes emerge

As of October 16, average Chinese domestic rebar and wire rod prices have indicated further slight declines compared to October 9, following lower futures prices after the holidays and given the absence of strong post-holiday restocking. However, on Monday, October 16, rebar futures have posted an increase, following the gains recorded late last week, amid hopes for better demand during the rest of October and high raw material prices.

The average rebar price in China has declined by RMB 13/mt ($1.8/mt) compared to October 9, while the average 6.5 mm HPB 300 wire rod price has also seen a decrease, by RMB 13/mt ($1.8/mt). At the same time, rebar prices have increased by RMB 13/mt ($1.8/mt) compared to Friday, October 13.

During the given period, rebar and wire rod prices in the Chinese domestic market have edged down slightly amid relatively high inventory levels and the decreasing trend of rebar futures prices during the first part of last week. Currently, the contrast between supply and demand in the rebar and wire rod market is not so strong, with some mills starting to implement brief maintenance works after the sharp fall in their margins. However, market players have started to be worried about the possible increase of the supply-demand imbalance as they think fewer production restrictions than they had expected may be implemented. Since the weather is quite good in October, the demand for rebar and wire rod will be decent up to the end of the month with construction activities at sites running smoothly. Accordingly, some market sources have hopes for a gradual improvement in longs prices in the coming weeks.

On October 16, rebar futures contract (rb2401) offers closed at RMB 3,657/mt ($509/mt) at Shanghai Futures Exchange, increasing by RMB 19/mt ($2.6/mt) compared to October 9, while increasing by 1.05 percent compared to the previous trading day.

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 7.1798