China resumes wire rod imports amid higher demand and prices locally

Thursday, 09 July 2020 16:13:54 (GMT+3)   |   Shanghai
       

Offer prices for ex-China wire rod have edged up slightly in the past week owing to higher demand in the local market, while they have been uncompetitive for overseas buyers. At the same time, import activity in China has resumed, supporting overall prices in the Asian market.

Ex-Vietnam wire rod has been sold at $453-455/mt CFR China recently. The price level indicates an increase compared to the previous deal to Southeast Asia - last week SteelOrbis had reported a deal for wire rod of the same origin at $435-445/mt CFR to the Philippines.  

Offer prices for wire rod from Malaysia have been heard at $455-460/mt CFR in Southeast Asia, in line with last week, while buyers have bid at $435-440/mt CFR Philippines.

Offers for ex-China wire rod have been heard at $465-475/mt FOB, up $5/mt compared to last week, but this has not been attractive for buyers. “Rising wire rod prices in the local market bolstered ex-China wire rod offer prices, while the increasing price gap between local and overseas wire rod has caused China to start importing again,” a trader commented.

During the given week, rebar futures prices have increased continuously, pushing up billet and longs prices and making market participants willing to conclude transactions. However, the rainy weather and floods in China have continued, exerting a negative impact on construction activities in the country, resulting in rising inventory of wire rod. Meanwhile, the high levels of iron ore prices have provided solid support for wire rod prices.

As of Thursday, July 9, rebar futures at the Shanghai Future Exchange are standing at RMB 3,726/mt ($532.3/mt), increasing by RMB 153/mt ($22.0/mt) or 4.3 percent since July 2.

$1 = RMB 7.0085


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