During the past week rebar prices in China showed a rebound after halting their decline. In the first half of the week, the domestic market moved on a weak trend against the background of a sluggish trading performance, with certain declines observed in the Beijing, Shanghai and Guangzhou markets. However, on the back of the recovery of end-side demand as well as the increased number of deals concluded by traders, market prices began to move up steadily in the remaining days of the week.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
20 mm | HRB 335 | 3,670 | 538 | 0 | |
20 mm | HRB 400 | 3,833 | 562 | +33 | |
Wire rod | 6.5 mm | Q235 | 3,597 | 527 | +7 |
On November 20, Shaoguan Steel announced increased its ex-factory prices, thereby boosting the market prices in Guangzhou by a small margin. On November 21, Jiangsu Province-based Shagang issued unchanged longs prices, which has helped to stabilize the local market.
Nevertheless, in the past week rebar inventories in Beijing, Shanghai and Guangzhou registered their first upward movement after four consecutive weeks of decline, with the overall market inventory climbing up by 10,000 mt or 2.8 percent.
On the other hand, the recent stagnant performance in the finished steel market has also impacted the raw materials market. Over the past week, the prices of iron ore, coke and semis all remained stable, with only the scrap market moving up. Moreover, iron ore inventories at the ports have climbed up recently, but this rise is not expected to affect market prices for the time being.
Looking at the international steel market, apart from the US market which has remained on a weak downward trend, all the other major markets have posted various increases, with uptrends notably seen in export quotations of CIS billet and in rebar prices in Turkey. Meanwhile, buyers from China and Turkey have started to conclude scrap purchases in recent days, thus providing support for scrap prices in the international market. At present, the US scrap market has halted its declining trend and become stable, with a rise recorded in export quotations for US scrap; meanwhile, the Japanese scrap market has now been rising for three consecutive weeks. Furthermore, due to the increased export quotations of CIS billet, Turkey and other countries have also increased their purchases of scrap.
In a context of brisk demand, rebar market supply also jumped up sharply in China. Domestic rebar production in October totaled 11.5852 million mt, up 53.1 percent year on year. Average daily production during the month reached 373,700 mt, up by 13,100 mt or 3.7 percent month on month. Meanwhile, China's wire rod production totaled 8.5739 million mt in the same month, up 50.2 percent year on year. Average daily wire rod production during the month reached 276,600 mt, down by 300 mt month on month. It is disturbing for market players to watch such strong growth when production is already at high levels.
Generally speaking, in the context of an overall rise in market demand, rebar prices in China have been experiencing an increasing upward momentum, mainly due to higher raw material prices and the recovery of the international market. As regards the future, the severe weather that has been continuing for nearly two weeks is expected to show an improvement, which is likely to stimulate market demand significantly in the coming week.