Chinese longs prices drop before local demand improves ahead of holidays

During the week ending September 28, average prices of Chinese domestic rebar and wire rod have edged down amid slack demand and the fluctuating trend in the futures market. Export prices for longs from China have also followed a downtrend. At the same time, domestic trading has improved recently ahead of long holidays.

Average rebar prices have lost RMB 20/mt, while wire rod – RMB 17/mt. During the given week, steelmakers’ rebar outputs increased slightly, while inventory level indicated faster decreases, signaling the improvement in demand from downstream users ahead of the long National Day holiday (October 1-8). Currently, market players have been willing to sell, aiming to lower inventory and prevent potential risks during long holiday.

At the same time, on Monday, export prices for rebar and wire rod from China have dropped by $10/mt to $470-480/mt FOB and $505-510/mt FOB respectively, according to SteelOrbis.

Rebar futures have almost remained stable last week, on September 28 rebar futures contracts (2101) closed at RMB 3,540/mt ($519/mt) at Shanghai Futures Exchange, up RMB 1/mt ($0.15/mt) or by 0.03 percent since September 21, while it moved up by 0.08 percent on September 28 compared to previous trading day, signaling market activity has lowered before the holidays.

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.  

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

 Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 6.8252