Weak sentiment and slack activity in Chinese rebar and wire rod market

During the week ending August 31, in the Chinese domestic market rebar and wire rod prices have seen a decreasing trend, while overall transaction activity in the domestic rebar and wire rod market has been at low levels. On August 31, rebar futures contract (1601) offers closed at RMB 1,952/mt ($306/mt) at Shanghai Futures Exchange, up $3/mt week on week. Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.

 

 

All prices include 17 percent VAT and all prices are ex-warehouse

 

Rebar prices in local Chinese market 

 

 

All prices include 17 percent VAT and all prices are ex-warehouse.

 

$1 = RMB 6.38

  

During the given week, long steel producers in central and southern China have raised their production capacity utilization rates, resulting in increased supply to the market. After the significant rebound in the previous period, local rebar and wire rod prices have indicated corrections in the past week. Since demand for rebar and wire rod will probably recover in September, rebar and wire rod prices are unlikely to indicate sharp declines. However, sentiment in the market is still weak. It is expected that rebar and wire rod prices in the Chinese domestic market will follow a slight downtrend in the coming week.