During the past week, wire rod and rebar prices in the main markets in China saw a strong decrease. Influenced by the export rebate cancellation and economic uncertainty, rebar demand has continued its weak trend. In addition, reductions in ex-mill prices have contributed to the significant fall in domestic rebar and wire rod prices.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
6.5 mm | Q235 | 3907 | 576 | -16 | |
20 mm | HRB 335 | 3,833 | 565 | -15 | |
20 mm | HRB 400 | 3947 | 582 | -16 |
In the Shanghai, Beijing and Guangzhou markets, the prices of Q235 grade 6.5 mm size high speed wire rod now respectively stand at RMB 3,900/mt ($575/mt), RMB 3,850/mt ($568/mt) and RMB 3,970/mt ($586/mt) while HRB 335 grade 20 mm rebar prices in these markets respectively stand at RMB 3,700/mt ($546/mt), RMB 3,900/mt ($575/mt) and RMB 3,900/mt ($575/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,720/mt ($549/mt), RMB 4,000/mt ($590/mt) and RMB 4,120/mt ($608/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.
During the past week the Chinese wire rod and rebar markets have declined at increased speed. In general, domestic long product prices have dropped by more than RMB 100/mt ($15/mt). The rebar price in the Shenyang market dropped by RMB 180/mt ($27/mt), with the wire rod price in this market down RMB 100/mt ($15/mt) week on week.
Price declines were particularly noteworthy in the eastern and northern markets. In eastern China demand was weak in general. At the start of July, Shagang Group decreased its high speed wire rod price and rebar prices by RMB 50/mt ($7/mt), generating pessimism in the market and triggering a further price decline. Rebar and wire rod inventories in the Shanghai market were 684,000 mt and 148,000 mt respectively, down 17,000 mt and up 7,000mt.
Rebar prices in the northeastern and northern Chinese markets also saw strong decreases, with significant. Most traders are not optimistic about the future market and as there is no sign of an improvement in market demand. Large scale steelmakers are not reducing or stopping production, so plentiful supplies are expected in the future with inventory likely to remain at high levels.
In future wire rod and rebar prices will remain soft but further strong drops do not seem possible. If wire rod and rebar enterprises start overhauls, this may reduce pressure from inventory. In addition, as the transaction prices of steelmills are generally high, while traders may suffer losses, there will not be any great fall in prices.