With the full return of major Asian wire rod exporters after the recent holidays, there has been seen a sharp drop in workable prices with more active Chinese non-VAT offering emerging again. Though major Chinese and ASEAN mills are not so aggressive and are adjusting them gradually, the mood in the Asian wire rod market is definitely bad.
Official offers for ex-China wire rod from mills have been heard at $460-480/mt FOB, down by $10/mt compared to October 9. The tradable prices are at $460-470/mt FOB, but even lower prices - around $10-30/mt below the above levels - have been reported from some Chinese sources offering and selling under the non-VAT scheme.
During the given period, demand for wire rod from downstream users in China has been slack, exerting a negative impact on market sentiments. Meanwhile, declining rebar futures prices have negatively affected prices in the spot market. Recently, apparent consumption has improved to a certain degree, though remaining below normal levels.
In Southeast Asia, a few bookings have been done to Vietnam for Chinese Q195/ SAE1008 wire rod at $450/mt CFR for November shipment. “Non-VAT offers started immediately when China was back from the holiday, so yes, this is again our reality,” an Asian trader commented, saying that, after some pause, wire rod on CFR basis has again started to be in line with billets due to the resumption of low-priced non-VAT wire rod offers. Buyers from other Southeast Asian countries have been receiving higher levels - $475-480/mt CFR in Thailand, for instance. But this level is also below that offered officially by big mills with VAT - $480-490/mt CFR.
Wire rod offer prices from Indonesia’s Dexin Steel have been heard at $460-463/mt FOB, going down by $2-5/mt from last week, and now the mill is offering for January shipment. Offer prices of ex-Malaysia SAE1006 wire rod have been at $480/mt FOB, decreasing by $10/mt week on week, and offers of ex-Vietnam CB300V-D6 wire rod have been heard at $510-520/mt FOB, remaining stable on average week on week.
As of October 16, rebar futures at Shanghai Futures Exchange are standing at RMB 3,049/mt ($436/mt), decreasing by RMB 47/mt ($6.6/mt) or 1.5 percent since October 9, while up 0.16 percent compared to the previous trading day, October 15.
$1 = RMB 7.0968