Demand slackens in local Chinese rebar and wire rod market

During the week ending May 18, in the Chinese domestic market rebar and wire rod prices have moved on a downward trend, while overall transaction activity in the domestic rebar and wire rod market has slackened compared to the previous week and is now at low levels. On May 18, rebar futures contract (1510) offers closed at RMB 2,349/mt ($378/mt) at Shanghai Futures Exchange, down $12/mt week on week. Average domestic rebar and wire rod prices in China's local main markets are presented in the following tables.

During the given week, the rainy weather in China has continued, resulting in slow consumption of rebar and wire rod on construction sites and thereby exerting a negative impact on rebar and wire rod sales activities. Meanwhile, rebar futures prices in China have moved down again, increasing the pressure on spot market prices. In addition, decreases in the stock market in China have also affected the commodity markets, negatively influencing prices of iron ore and finished steel. Amid higher temperatures and the rainy weather, domestic prices for rebar and wire rod are unlikely to gain support from the demand side in the coming period. It is expected that rebar and wire rod prices in the Chinese domestic market will indicate some further minor downticks in the week ahead. 

Prices include 17 percent VAT.

$1 = RMB 6.20