Local Chinese longs prices still fall as demand softens more than supply

As of August 14, average Chinese domestic rebar and wire rod prices have continued to follow a downtrend as demand has remained poor and even lower supply cannot help to stop it.

The average rebar price has declined by RMB 30/mt ($4.2/mt) compared to August 7, while the average 6.5 mm HPB 300 wire rod price has seen a decrease of RMB 27/mt. Rebar prices have decreased by RMB 10/mt ($1.4) compared to last Friday.

During the given week, rebar and wire rod prices in the Chinese domestic market have indicated a downtrend amid the negative impact from the floods in northern China. Meanwhile, the heavy rainfall in northeastern China will continue to negatively affect the demand for rebar and wire rod in the near future. At the same time, the supply of rebar and wire rod has also declined amid the prevailing bearish sentiments among market players. The inventory of rebar and wire rod has increased, signaling a contradiction between supply and demand. It is thought that rebar and wire rod prices in the Chinese domestic market will likely edge down further in the coming week.

On August 14, rebar futures contract (rb2210) offers closed at RMB 3,641/mt ($508/mt) at Shanghai Futures Exchange, decreasing by RMB 91/mt ($12.7/mt) or 2.4 percent compared to August 7, while declining by 0.84 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 7.1686