During the week ending June 28, wire rod inventories were on the rise in the Chinese domestic market, while a minor decrease was observed in rebar inventories. Influenced by the heavy rainstorms which occurred late last week in eastern and southern China, longs demand has slumped to fairly low levels in these regions. As of June 28, average longs prices in the main Chinese cities are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
6.5 mm |
Q235 |
4,013 |
592 |
+1 |
|
20 mm |
HRB 335 |
3,937 |
581 |
- |
|
20 mm |
HRB 400 |
4,053 |
598 |
- |
In China's three main steel markets, i.e., Shanghai, Beijing and Guangzhou, the prices of Q235 grade 6.5 mm size high speed wire rod now respectively stand at RMB 4,000/mt ($587/mt), RMB 3,970/mt ($586/mt) and RMB 4,070/mt ($600/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,780/mt ($558/mt), RMB 4,050/mt ($597/mt) and RMB 3,980/mt ($587/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,810/mt ($562/mt), RMB 4,150/mt ($612/mt) and RMB 4,200/mt ($619/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.
The expected continuation of the rainstorms in eastern and southern China will exert a further influence on construction projects in these regions. Also given the anticipated arrival of the rainy season in early July, construction steel prices are expected to drop down in the short term.
Compared with the east and the south, northern China has observed a positive performance in terms of orders due to the good weather conditions. Prices in this regional market have shown a strong trend, even with some increases of RMB 10-20/mt ($2-3/mt) seen. Furthermore, many mills have recently cut back their production of long products, thus promoting the slight uptrend in prices in this region. However, it is expected that demand will be impaired due to the hot summer weather.
Market players are now acting with greater caution due to their concerns that the central government may raise interest rates soon. In the context of higher raw material prices, supply shortages of some specifications and production cutbacks by some mills, domestic longs prices in China are not expected to slip much in the coming period.