Average offer prices from Chinese and ASEAN region-based wire rod producers on FOB basis have remained relatively stable over the past week, but the weak local market in China and the bearish sentiments have continued to exert pressure on the import wire rod market in Southeast Asia. Some market sources believe that the market is near its bottom now.
Offers for ex-China wire rod from second-tier mills have been heard at $540-550/mt FOB, moving sideways given the lack of rising momentum amid the prevailing cautious sentiments. “The demand has improved slowly from downstream users, resulting in a prevailing wait-and-see stance among market players. Though China has set a reasonable target of five percent for its gross domestic product (GDP) in 2024, the continuous sluggish performance in the real estate sector has weakened the support for the steel market,” an international trader said. Market players think that the increasing trend of inventory levels may hit its peak as demand will gradually improve in the near future, especially when the weather becomes warmer, and so wire rod prices in the Chinese domestic market may bottom up in the coming week.
Offer prices of Indonesian Dexin Steel wire rod have been heard at $545/mt FOB, offer prices of ex-Malaysia wire rod have been heard at $550/mt FOB, while Vietnam’s Hoa Phat has been asking for $560/mt FOB at the lowest.
However, in the import wire rod market, the lowest price for Chinese Q195 material has been reported at $530/mt CFR in the last deal to the Philippines, while for Q235 the level is $535-540/mt CFR, down by $10/mt over the past week.
As of March 7, rebar futures at Shanghai Futures Exchange are standing at RMB 3,705/mt ($541.4/mt), decreasing by RMB 83/mt ($11.7/mt) or 2.2 percent since February 29, while up by 0.03 percent compared to the previous trading day, March 6.
$1 = RMB 7.1001