The worsening of Covid-19 outbreak in Southeast Asia has impacted the import wire rod market with some importers voicing bids as low as $700/mt CFR. Some regional suppliers have decreased their offers for wire rod, but not sufficiently to close deals. Average offer prices for ex-China wire rod have moved sideways compared to the previous week even despite the declining trend of local Chinese wire rod prices and sharply decreasing iron ore prices.
The lowest offers for IF wire rod have been reported in the Philippines at $725/mt CFR this week, at least $5/mt below the level last week. But traders have been receiving bids at only $700/mt CFR Manila. An ex-Malaysia offer for BOF-route wire rod has been at $740/mt CFR, “but that level is unattractive in the Philippines,” a source said, while an ex-Vietnam BOF wire rod price was at $750/mt CFR. Prices above this have been heard only from Indonesia. “Dexin’s wire rod has been expensive for quite some time because the market for billet is better than for rods,” a local source said. In Thailand, customers have also been reluctant to accept the current wire rod prices even after some decline.
Offers for ex-China wire rod have been heard at $820-860/mt FOB, moving sideways on average compared to the previous week. Export prices are expected to go down in the near future, as soon as some news about the new export duties is released. “The decreasing trend in local wire rod prices will negatively affect ex-China wire rod offer prices, while the slack demand has also weakened the support for the market. The sharply decreasing iron ore prices have also depressed sentiment,” an international trader said.
As of August 20, rebar futures at the Shanghai Futures Exchange are standing at RMB 5,100/mt ($785/mt), decreasing by RMB 382/mt ($59/mt) or 7.0 percent since August 13.