Local Chinese longs prices rise slightly on back of expectations

As of July 3, average Chinese domestic rebar and wire rod prices have moved up compared to June 26 mainly amid expectations of further stimulus measures from the government, while demand has remained at reduced levels.

The average rebar price has increased by RMB 53/mt compared to June 26, while the average 6.5 mm HPB 300 wire rod price has risen by RMB 47/mt. Rebar prices have seen a drop of RMB 7/mt compared to last Friday even though some production restrictions measures have been reported in Tangshan.

During the given week, rebar and wire rod prices in the Chinese domestic market edged down first while moving up later, with the average prices indicating rises compared to last week. Currently, demand for rebar and wire rod has remained slack and this will continue to exert a negative impact on prices. However, slightly more optimistic sentiments have prevailed among market players as they expect more stimulus policies, which may bolster the real estate industry. In addition, the municipal government of Tangshan, an important steel production base in northern China, has required the 11 A-class steel mills to take initiative to cut steel production by 30 percent, while B-class or lower class steel mills need to suspend 50 percent of their sintering equipment during July. It is expected that rebar and wire rod prices in the Chinese domestic market will edge up in the coming week.

On July 3, rebar futures contract (rb2210) offers closed at RMB 3,767/mt ($522/mt) at Shanghai Futures Exchange, rising by RMB 100/mt ($14/mt) or 2.7 percent compared to June 26, while increasing by 0.56 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 7.2157