During the week ending September 21, average prices of Chinese domestic rebar and wire rod have moved down amid the decreasing trend in the futures market in China and prevailing bearish sentiments. The weaker local market has resulted in some decline in both rebar and wire rod export prices from China.
Average rebar prices in China have are down RMB33/mt, while average wire rod prices have decreased by RMB 23/mt, week on week. Inventory of rebar has not been very high, but the improvement in demand has not reached market participants’ expectations, which has exerted a negative impact on the rebar and wire rod market. The supply-demand balance has not been good as offered volumes have exceeded consumption. The declining ferrous metal futures prices have weakened sentiments, which will negatively affect the market.
Rebar futures closed at RMB 3,539/mt ($524/mt) at Shanghai Futures Exchange on September 21, down RMB 125/mt ($18.5/mt) or 3.4 percent since September 14, and down by 1.59 percent compared to the previous trading day, indicating the cautious mood of market players as regards the future prospects for the market.
Moreover, falling billet prices have also led to lower rebar prices. Over the weekend, domestic billet prices lost another RMB 50/mt in Tangshan.
Long steel export prices from China have also been under pressure from the weakening domestic market. Ex-China rebar and wire rod offers are both down $5/mt, to $480-490/mt FOB and $515-520/mt FOB, respectively.
Approaching the National Day holiday (October 1-8), there may be some gradual stock replenishment early next week, which will likely prevent rebar and wire rod prices from recording a further sharp drop.
Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.
Rebar prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price |
Weekly change |
Weekly change |
|
25 - HRB400 |
Beijing |
3,680 |
544.4 |
-20 |
3.1 |
|
Guangzhou |
4,010 |
593.2 |
-30 |
2.2 |
|
|
Shanghai |
3,700 |
547.3 |
-50 |
-1.2 |
|
|
Average price |
3,796.7 |
561.6 |
-33 |
1.4 |
All prices include 13 percent VAT and all prices are ex-warehouse.
Wire rod prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Weekly change |
|
6.5 - HPB300 |
Beijing |
4,430 |
655.3 |
-10 |
5.8 |
|
Guangzhou |
4,260 |
630.2 |
-30 |
2.6 |
|
|
Shanghai |
4,010 |
593.2 |
-30 |
2.2 |
|
|
Average price |
4,233.3 |
626.2 |
-23 |
3.5 |
|
|
8 - HPB300 |
Beijing |
4,210 |
622.8 |
-10 |
5.5 |
|
Guangzhou |
4,200 |
621.3 |
-30 |
2.5 |
|
|
Shanghai |
4,010 |
593.2 |
-30 |
2.2 |
|
|
Average price |
4,140.0 |
612.4 |
-23 |
3.4 |
All prices include 13 percent VAT and all prices are ex-warehouse.
$1 = RMB 6.7595