During the given week, ex-China and ex-Malaysia rebar offer prices have indicated slight declines due to demand pressure, but, with the recent increase in raw material prices and possible improvements in China, some rebound is expected for the second half of this month.
Ex-China rebar offer prices have been heard at $475-480/mt FOB, edging down by $2.5/mt on average compared to July 31.
During the given week, rebar futures prices in China moved down first and rebounded later, while both demand and supply have been weak, resulting in rising inventories in the spot market. Rebar producers have cut their outputs amid losses, while inventory has been at high levels, exerting a negative impact on prices. Meanwhile, the third round of declines in coke prices is being implemented, weakening the support for rebar prices from the cost side.
Recently, production cuts in China have been speeding up amid the losses on the producers' side, which may bolster rebar prices to a certain degree. At the same time, the tight supply of coking coal may provide support for rebar rebounding in the near future. The relatively low prices of rebar may stimulate some market players to build up some stocks, which will positively affect prices. However, since Typhoon Dolphin is approaching, construction activities may be affected, which will dampen market sentiments. It is thought that rebar prices in the Chinese domestic market will fluctuate within a limited range in the coming week, while market players expect a rebounding trend in mid-to-late August.
Meanwhile, offer prices of ex-Malaysia rebar have been heard at $495/mt CFR Singapore, theoretical weight, down $5/mt on average compared to July 31. Offer prices of ex-China rebar stand at $500/mt CFR Singapore, for prompt shipment, theoretical weight, down $2.5/mt compared to July 31. But for firm bids, both exporters are ready to agree on $490-495/mt CFR Singapore.
In the Hong Kong market, buyers' target prices stand at $480/mt CFR, actual weight, remaining stable on average compared to July 31, while offer prices are at $495-500/mt CFR.
Average rebar spot prices in China have lost RMB 4/mt ($0.6/mt) compared to July 31, standing at RMB 3,143/mt ($463/mt) ex-warehouse, according to SteelOrbis' information.
As of August 7, rebar futures at Shanghai Futures Exchange are standing at RMB 3,008/mt ($443/mt), increasing by RMB 4/mt ($0.6/mt) or 0.1 percent since July 31, while rising by 0.07 percent compared to the previous trading day, August 6.
$1 = RMB 6.7904
