Average offer prices for ex-China wire rod have moved down sharply over the past week, while traders have become aggressive, trying to accelerate sales after weeks of very slow trading. Some Chinese traders’ offers have been reported even below import billet prices in Southeast Asia, reflecting the bad situation in the wire rod segment.
Offers for ex-China wire rod from a number of mills have been heard at $620-630/mt FOB, decreasing by $35/mt compared to March 16. “During the given week, pollution due to dust and sand has been serious [in northern China], exerting a negative impact on construction activities, dragging down wire rod prices, while at the same time iron ore prices have moved down, weakening the support from the cost side. Nevertheless, demand for wire rod is anticipated to be good in the traditional peak season, which will likely bolster prices within a few weeks,” an international trader said.
At the same time, there have been reports that Chinese traders have been offering SAE1006 and 1008 wire rod from Chinese mills at $610/mt CFR Manila and even slightly below this level, with a number of sources confirming that it is “for non-VAT trading, which is popular in HRC and can result in up to $20/mt lower prices,” an Asian source said. Also, Chinese traders have been offering ex-Indonesia wire rod in positions at $615/mt CFR, which has been also assessed as very low. The lowest offers that could be found from mills in Asia have been reported at $630-650/mt CFR the Philippines, while buyers still hold a wait-and-see stance as regards concluding purchases.
In such conditions, import wire rod prices in Southeast Asia have come to $610-630/mt CFR, down from $630/mt reported last week.
In addition, there have been reports that ASEAN mills have been ready to provide $680/mt CFR for buyers in the MENA region and Europe.
As of March 24, rebar futures at the Shanghai Future Exchange are standing at RMB 4,107/mt ($600.4/mt), moving down by RMB 155/mt ($22.7/mt) or 3.6 percent since March 17.
$1 = RMB 6.8374
