Average offer prices for ex-China wire rod have moved down over the past week amid the prevailing cautious sentiments among market players. This has also caused ASEAN-based exporters to become more flexible in providing discounts. However, since the futures and spot markets in China have been fluctuating and have ended the week at higher levels, the future price direction is still unclear.
Offers for ex-China wire rod from second-tier mills have been heard at $520-540/mt FOB, moving down by $10/mt compared to a week ago. During the given week, iron ore prices have been at relatively high levels, bolstering wire rod prices from the cost side, while the prevailing cautious sentiments among market players have exerted a negative impact on the wire rod market. “The rainy weather in eastern China has weakened demand, though construction activities may speed up in the coming period as the weather will get colder and colder in the future, which will exert a positive impact on the wire rod market. Also, stock replenishment is expected ahead of the long National Day holiday [September 29-October 6],” a large Chinese trader said.
Official offer prices of ex-Indonesia and ex-Malaysia wire rod from mills have been heard at $520-530/mt FOB, down $5/mt week on week. Though last week $520/mt FOB was also reported as “possible”, this week the level has been confirmed in official offers.
In Southeast Asia’s import market, most offers from traders and small producers in China have been at $540/mt CFR. Meanwhile, lower offer prices for ex-Middle East and ex-Russia wire rod have been heard, at as low as $520-530/mt CFR, though demand from users in Southeast Asia has been slack.
As of September 15, rebar futures at the Shanghai Future Exchange are standing at RMB 3,824/mt ($532.6/mt), increasing by RMB 107/mt ($14.9/mt) or 2.9 percent since September 8.