During the week ending August 25, rebar and wire rod prices in the Chinese domestic market have continued to follow a downward movement, while overall transaction activity for both rebar and wire rod has remained at poor levels. On August 25, rebar futures contract (1501) offers closed at RMB 2,974/mt ($483/mt) at Shanghai Futures Exchange, down $6/mt compared to the previous week. Average domestic rebar and wire rod prices in China's main markets can be viewed in the SteelOrbis price reports section.
In the given week, most domestic steelmakers' ex-works prices for rebar and wire rod have indicated significant downticks, with ex-works wire rod prices in eastern China declining by RMB 100/mt ($16/mt) and ex-works rebar prices in the region decreasing by RMB 50/mt ($8/mt). Inventory of rebar and wire rod on the steelmakers' side has been at high levels, and so mills have had to lower their ex-works prices in an effort to stimulate sales.
The high capacity utilization rates of mills has resulted in increased supply pressure in the rebar and wire rod market, while consumption from construction sites has not shown any improvement, negatively impacting rebar and wire rod prices. Meanwhile, the continuous appreciation of the US dollar has exerted a negative influence on the commodity markets, with prices of both finished steel and raw materials declining in China. It is expected that rebar and wire rod prices in the Chinese domestic market will continue to follow a downward trend amid pessimistic sentiment.