Average offer prices for ex-China wire rod have remained stable after the Labor Day holiday, and are the most competitive among Asian origins. ASEAN mills have kept their offers high being either sold out or targeting distant markets.
Offers for ex-China wire rod from second-tier mills have been heard at $450-460/mt FOB, moving sideways on average compared to April 24.
This week, the People’s Bank of China has decided to cut the reserve requirement ratio (RRR) for Chinese banks by 0.5 percentage points effective as of May 15 and to lower the interest rate for individual housing provident fund loans by 0.25 percentage points as of May 8, exerting a positive impact on market sentiments. The capacity utilization rates of wire rod producers will be restricted, which will reduce production and bolster prices to a certain degree. However, the release of demand for wire rod from downstream users is expected to be limited, which will affect prices negatively. It is thought that wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
Wire rod offer prices from Indonesia’s Dexin are still heard at $520/mt FOB for September shipment, as the mill is not eager to sell. Offer prices of ex-Malaysia wire rod have been heard at $500/mt FOB, while prices of ex-Vietnam wire rod have been at $505/mt FOB.
As of May 8, rebar futures at Shanghai Futures Exchange are standing at RMB 3,052/mt ($431/mt), decreasing by RMB 54/mt ($7.5/mt) or 1.74 percent since April 24, while down 1.74 percent compared to the previous trading day, May 8.
$1 = RMB 7.2073