Big decreases have been observed in the Chinese longs market during the week ended May 17, resulting from the decline in domestic housing starts in recent weeks caused by the Chinese government's measures to control the real estate market. Consequently, few transactions have been concluded in the market during the week in question.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
6.5 mm |
Q235 |
4,093 |
600 |
-45 |
|
20 mm |
HRB 335 |
4,133 |
606 |
-40 |
|
20 mm |
HRB 400 |
4,233 |
621 |
-45 |
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 4,040/mt ($592/mt), RMB 3,980/mt ($584/mt) and RMB 4,260/mt ($625/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,910/mt ($573/mt), RMB 4,270/mt ($626/mt) and RMB 4,220/mt ($619/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,930/mt ($576/mt), RMB 4,350/mt ($638/mt) and RMB 4,420/mt ($621/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.
During the past week, prices have dropped by RMB 200/mt ($29/mt) on average in the Chinese longs market, with some cities registering declines of up to RMB 300/mt ($44/mt). The recent slumps in the stock and futures markets have impaired confidence in the spot market, inducing more sellers to lower their transaction prices. In response to the current downtrend, domestic mills have moved quickly to cut their ex-works prices in order to keep up with changes in the market, though their prices still lag behind the market trend somewhat. Traders with high inventories have incurred losses.
On the end-user side, nobody is willing to conclude large tonnages given the current downtrend. Even with much lower prices than in previous weeks, few transactions have been concluded as it is not yet clear when the market will reach the bottom.
Meanwhile, China's iron ore import market has also been following a softening trend, with slowness seen in buyers' purchasing activities as import prices remain at high levels. Some domestic mills have chosen to reduce or stop production.