Local Chinese long steel market receives support from costs and improving demand

During the week ending April 27, in the Chinese domestic market rebar and wire rod prices have generally indicated a stable trend, though rebar prices in northern China have moved on an uptrend, while overall transaction activity in the domestic rebar and wire rod market has been at decent levels. On April 27, rebar futures contract (1510) offers closed at RMB 2,394/mt ($385/mt) at Shanghai Futures Exchange, up $18/mt week on week.

During the given week, rebar futures prices in China have rebounded, providing support for prices in the spot market. Meanwhile, iron ore prices in both the spot and futures markets have indicated an uptrend, bolstering rebar and wire rod prices from the cost side. In addition, purchasing activities for construction projects have risen to a certain extent in the given week.

The international iron ore giants have lately stated that they will slow down their production expansions, which will provide support for iron ore prices and thereby positively affect rebar and wire rod prices. Furthermore, some small domestic steel producers have cut their rebar and wire rod outputs, while demand is recovering amid the warmer weather, which will help reduce inventory levels in the rebar and wire rod market. It is expected that rebar and wire rod prices in the Chinese domestic market will rebound in the coming week.

All prices include 17 percent VAT and all prices are ex-warehouse.

$1 = RMB 6.22