Though the overall situation in Southeast Asia’s import wire rod market has yet to improve, major regional suppliers have increased their offers, seeing demand from non-traditional destinations, Europe in particular, where mills have been stopping their facilities due to hike in energy costs. At the same time, wire rod prices in China have remained under pressure, which has added to an already complex situation in the region.
Ex-Malaysia wire rods have been offered at $595-605/mt CFR Manila this week, up by around $5/mt from last week. And even though there has still been limited demand in the Philippines, the reference price for imported wire rod has increased from $575-590/mt CFR to $590/mt CFR, since it will be hard for buyers to achieve any lower prices at the moment. Some traders with positions have still been offering to Southeast Asia at $590/mt CFR, but it is a matter of time before they also attempt to increase prices, according to market sources.
Offer prices of Vietnam’s Hoa Phat commercial wire rod have been heard at $610-620/mt FOB.
The offer price hikes have resulted from the recent increase in export activity of ex-ASEAN sellers to distant markets. One lot of 5,000 mt of ex-Indonesia wire rod has been traded to Italy at $690/mt CFR or so, while a bigger volume (10,000-20,000 mt) of ex-Malaysia wire rod has been sold to Spain at $700/mt CFR. Before these deals, some deals were negotiated at $670-680/mt CFR, but the details are not available at the time of publication. The freight from the ASEAN region to Europe is up to $100/mt, but it is dependent on the cargo size as most mills will try to combine billet and wire rod in shipments.
Offers for ex-China wire rod have been heard at $580-610/mt FOB, down by $10/mt on average compared to September 1. “Capacity utilization rates of steelmakers have risen, increasing the supply of wire rod to the market, while demand from downstream users has indicated some improvement, but not enough,” an international trader said.
As of Thursday, September 8, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,719/mt ($539/mt), increasing by RMB 77/mt ($1.6/mt) or 2.1 percent since September 1.
