Over the past week China's domestic long products market has started to follow a soft trend, with a certain decline observed in some regions. Meanwhile, China's central bank announced a sudden hike of the deposit reserve ratio, which is expected to exert an influence on the market.
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Wire Rod |
6.5 mm |
Q235 |
3,913 |
574 |
-34 |
20 mm |
HRB 335 |
3,823 |
561 |
-50 |
|
20 mm |
HRB 400 |
3,983 |
584 |
-47 |
By the end of trading on January 15, market prices of 6.5 mm Q235 high speed wire rod were at RMB 4,000/mt ($587/mt), RMB 3,720/mt ($545/mt) and RMB 4,020/mt ($589/mt) in Shanghai, Beijing and Guangzhou respectively; meanwhile 20 mm HRB 335 rebar prices stood at RMB 3,750/mt ($550/mt), RMB 3,700/mt ($543/mt) and RMB 4,020/mt ($589/mt) in the above respective areas, with 20 mm HRB 400 offered at RMB 3,880/mt ($569/mt), RMB 3,800/mt ($557/mt) and RMB 4,270/mt ($626/mt) respectively.
Apart from some individual mills, most Chinese longs producers again raised their prices, by RMB 10-80/mt ($1-12/mt), during the past week. On January 11, Yonggang increased its ex-factory prices of high speed wire rod by RMB 60/mt ($8/mt) and hiked its rebar prices by RMB 30/mt ($4/mt). As a result, the producer's price of 6.5 mm wire rod is now at RMB 4,190/mt ($614/mt), while its price for 20 mm rebar stands at RMB 3,829/mt ($561/mt).
Also on January 11, Fujian Sangang announced upward adjustments of RMB 80/mt ($12/mt) and RMB 60/mt ($8/mt) respectively to its ex-factory prices of high speed wire rod and rebar for January. Following the adjustment, the price of 6.5 mm wire rod is now at RMB 4,950/mt ($726/mt), while the price of 14-25 mm diameter HRB 335 stands at RMB 3,820/mt ($560/mt).
On the macroeconomic side, the People's Bank of China (PBC), i.e., the Chinese central bank, announced on January 12 that the deposit reserve ratio of large financial institutions in China will be adjusted in an upward direction by 0.5 of a percentage point to 16 percent as of January 18, 2010, sending signals that China's monetary policy may be switching from "very loose" to "moderately loose", which is expected to have a knock-on impact on the steel markets.
As regards raw materials, domestic pig iron and scrap prices in China have risen steadily in recent days, with the pig iron market characterized by brisk demand due to producers' lack of stocks. Meanwhile, the billet market has recorded a minor correction of RMB 50/mt ($7/mt), with most players currently standing aside from the market.
Overall, China's domestic longs market is likely to enter a fluctuating trend in the near future. With no momentum available for any further upward movement given the increase in market inventory, domestic longs prices could start to fall under any minor impetus in the context of unclear government policies and lack of clarity in the demand situation.