Average offer prices for ex-China wire rod have inched up further over the past week, while ASEAN mills have also remained bullish, even though overall sentiments in Asia have eased, following local declines in spot and futures prices in China.
Offers for ex-China wire rod from second-tier mills have been heard at $540-560/mt FOB, up by $7.5/mt on average compared to November 23. Big mills are still indicating offers at $570/mt FOB. Inventory of wire rod has started to rise in China amid slack demand from downstream users, while supply of wire rod has decreased, resulting in a weak balance between supply and demand. This follows moves by the Chinese government to eliminate excessive speculation in iron ore prices, which have declined in recent days, while iron ore futures prices again rose by 1.36 percent on November 30 compared to the previous day. “This signals that the support from the cost side may remain firm in the near future, though it may be hard for wire rod producers to achieve decent profitability,” an international trader said.
Offer prices of ex-Indonesia, ex-Malaysia and ex-Vietnam wire rod have been heard at $550-560/mt FOB, moving up by $10/mt compared to on November 23. There has been a deal rumored to Europe at $540/mt FOB last week, but this information could not be confirmed by the time of publication.
In Southeast Asia’s import wire rod market, offers from traders have been reported at the previous levels of around $540-550/mt CFR for different origins, while bids from the Philippines have not been above $535/mt CFR.
As of Thursday, November 30, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,913/mt ($551/mt), decreasing by RMB 21/mt ($3/mt) or down 0.5 percent since November 23, while increasing by 0.23 percent compared to the previous trading day (November 29).
$1 = RMB 7.1018