Stock replenishment boosts activity in local Chinese rebar and wire rod market

During the week ending June 6, Chinese domestic rebar and wire rod prices have mostly decreased, though prices of wire rod have risen in Beijing and remained stable in Shanghai, while transaction activity in the overall domestic rebar and wire rod market has improved and is now at medium levels. On June 6, rebar futures contract (1610) offers closed at RMB 2,059/mt ($314/mt) at Shanghai Futures Exchange, up $12/mt week on week. Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.

During the given week, due to oversupply in the domestic rebar and wire rod market, prices have generally moved on a soft trend. However, since the Dragon Boat Festival Holiday (June 9-12) is approaching, construction sites have stepped up their purchases in order to build up their inventories, resulting in improvement in transaction activities. Meanwhile, Chinese steelmakers have lowered their capacity utilization rates, trying to reduce supply pressure on the long steel market, and this will likely provide some support for rebar and wire rod prices. The sales prices of rebar and wire rod have dropped to relatively low levels, and so steelmakers might not have much room for further price reductions. It is thought that rebar and wire rod prices in the Chinese domestic market will likely move sideways in the coming week.

Wire rod prices in local Chinese market

All prices include 17 percent VAT and all prices are ex-warehouse
 
Rebar prices in local Chinese market

All prices include 17 percent

$1 = RMB 6.56