Average offer prices for ex-China wire rod have edged up only slightly over the past two weeks, while ex-ASEAN offers have mainly been stable over the same period. However, the market mood has improved towards the end of February amid better activity.
Offers for ex-China wire rod have been heard at $475-490/mt FOB, edging up by $2.5/mt on average compared to February 12. The tradable prices have been heard at $475-485/mt FOB and there are still no offers for cheaper non-VAT material.
During the given week, wire rod prices in the Chinese domestic market have moved sideways amid the quiet market following the long Chinese New Year holiday (February 14-23). Inventories of wire rod have increased significantly, exerting a negative impact on market sentiments. Meanwhile, a wave of large-scale rainy weather has negatively affected construction activities. However, steelmakers in northern China have been required to reduce production, which will bolster wire rod prices to a certain degree. It is expected that wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week, but trading in the local market is expected to post improvements next week.
Wire rod offer prices from Indonesia’s Dexin have been stable at $485/mt FOB for April shipment. But market sources believe that new offers could be at least $5/mt higher for the next round of sales, as some low-volume deals have already been reported. In particular, a deal for Indonesian low-carbon wire rod has been signed at $500-505/mt CFR in Thailand.
Some other buyers in Southeast Asia are still asking for $490/mt CFR for import wire rod, but most offers from all origins, including China, are starting from $500/mt CFR and up to $520/mt CFR at the moment.
As of February 26, rebar futures at Shanghai Futures Exchange are standing at RMB 3,063/mt ($443/mt), increasing by RMB 13/mt ($1.9/mt) or 0.4 percent since February 12, while up 0.2 percent compared to the previous trading day, February 25.
$1 = RMB 6.9228
