Chinese longs prices weaken, restocking ahead of holidays may give some support

During the week ending September 14, average prices of Chinese domestic rebar and wire rod have mostly moved down amid the decreasing trend in futures prices, increasing inventory level and slackening demand.

During the given week, average rebar prices have lost RMB17/mt, while wire rod – RMB 3/mt. Though steelmakers’ outputs for rebar and wire rod indicated slight declines, inventory level has increased slightly, indicating demand slackened, exerting a negative impact on market players’ sentiments towards future rebar and wire rod market in traditional peak season. However, as the long National Day holiday (October 1-8) is approaching, downstream users may build up stocks ahead of the long holiday, which will likely boost the demand in the near future. It is thought that rebar and wire rod prices in the Chinese domestic market will edge up slightly in the coming week.

Rebar futures increased slightly last week, on September 14 rebar futures contract (2101) offers closed at RMB 3,664/mt ($546/mt) at Shanghai Futures Exchange, down RMB 72/mt ($10.5/mt) or by 1.9 percent since September 7, while it moved up by 0.47 percent on September 14 compared to previous trading day, signaling improvement in market players’ sentiments towards prospect for the future market.

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 6.8361