Chinese wire rod prices slightly down, rebar sees moderate rise

In the week ending May 31, wire rod prices have slightly declined in the Chinese domestic market, while rebar prices have trended up moderately. As the month of June approaches, local steel mills are set to announce new price policies, and so market players are mostly maintaining a waiting-and-see approach. As of May 31, average sales prices of rebar and wire rod in the main Chinese cities are follows:

In China's three main steel markets, i.e., Shanghai, Beijing and Guangzhou, the prices of Q235 grade 6.5 mm size high speed wire rod now respectively stand at RMB 4,080/mt ($598/mt), RMB 4,000/mt ($587/mt) and RMB 4,270/mt ($626/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,860/mt ($566/mt), RMB 4,200/mt ($616/mt) and RMB 4,200/mt ($616/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,880/mt ($569/mt), RMB 4,300/mt ($630/mt) and RMB 4,450/mt ($622/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.

Early last week, Chinese longs market indicated a rising trend. However, with rumors circulating that the central government was planning to adjust the export rebate for flat steel products, market players became less confident and longs prices also saw a decrease. The Chinese authorities subsequently denied they had any plans to adjust the rebate rate.

As wire rod inventory has declined noticeably, sales prices in some Chinese cities rose during the weekend.

With many uncertainties in the market, end-users have adopted a waiting approach, only purchasing the minimum tonnages they require. Meanwhile, due to high production costs, some small and medium sized longs producers have had to halt or scale back their production.

It is thought that the domestic longs market in China will likely trend sideways in the coming period.