Average offer prices for ex-China wire rod have moved sideways over the past week amid high raw material prices. There are expectations for an improvement in demand in China ahead of the long holiday in early October, but overall sentiment is far from positive. ASEAN region-based mills have also failed to see any demand at higher levels, at least so far.
Offers for ex-China wire rod from second-tier mills have been heard at $520-540/mt FOB, remaining stable compared to September 14. “The supply of wire rod has been characterized by a certain tightness, while some downstream users have started building up stocks ahead of the long National Day holiday [September 29-October 6], bolstering prices. The expectations for future economic development have improved to a certain degree, which will positively affect the market,” a trader said.
The tradable price levels for ex-Indonesia and ex-Malaysia wire rod have been heard at $520-530/mt FOB, remaining stable week on week. This has happened even though the leading Indonesian mill was trying to push official offers to $530-535/mt FOB early this week after signing some deals at slightly below $520/mt FOB to distant markets. “Even $520/mt FOB is not so workable, so this increase is nominal for now, I think,” a trader said.
The October-December period will be the traditional peak season for construction activities in Southeast Asia, which will boost the demand for wire rod in the near future. However, for now the tradable level in Southeast Asia’s import market for Asian wire rod is still at $520-525/mt CFR Manila, according to sources, and up to $530-535/mt CFR Bangkok. Early this week, traders were trying to push prices up to $525-530/mt CFR Manila for Q235 wire rod but failed.
As of Thursday, September 21, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,762/mt ($525/mt), decreasing by RMB 32/mt ($4.5/mt) or down 0.84 percent since September 14, while decreasing by 2.01 percent compared to the previous trading day, September 20.
$1 = RMB 7.173