During the week ending June 24, rebar and wire rod prices in the Chinese domestic market have continued to indicate a decreasing trend, with larger declines seen in rebar prices, while overall transaction activity for rebar and wire rod has remained sluggish. On June 24, rebar futures contract (1410) offers closed at RMB 3,064/mt ($500.5/mt) at Shanghai Futures Exchange, up by $10.5/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.
Although rebar and wire rod inventory levels on the traders' side have continued to decline, steelmakers' inventories have remained at high levels. Accordingly, steelmakers have lowered their ex-works prices for rebar and wire rod, though their recent downward adjustments have been by smaller margins than before. Market insiders state that steelmakers still have decent profit margins following the declines in iron ore prices and so they are reluctant to cut their outputs. However, some small and medium-sized producers of rebar and wire rod may carry out maintenance work in the off-season in July and this would help to ease supply pressures. It is expected that rebar and wire rod prices in the Chinese domestic market will decline at a slower pace in the coming week as import iron ore prices are expected to show greater firmness.