Average offer prices for ex-China wire rod have remained stable over the past week, but some lower-priced offers are still available and, even despite the rebound in futures prices, the outlook is still generally negative.
Offers for ex-China wire rod have been heard at $500-510/mt FOB, moving sideways on average compared to July 9. The tradable prices are heard at $500/mt FOB at the lowest, mainly for the regional market. Meanwhile, there are low-carbon non-VAT wire rod supplies circulating into the market, heard at $475-485/mt FOB, still exerting pressure on normal tax-included material.
During the given week, wire rod prices in the Chinese domestic market have fluctuated within a limited range. Rebar futures prices have seen some rises compared to last week, while both long and short positions in the futures market reflect a decline in interest, signaling the prevailing cautious sentiments among market players.
In June alone, China’s finished steel exports amounted to 10.32 million mt, decreasing by 0.2 percent month on month, while up 6.6 percent year on year, shifting from the previous year-on-year decline - which bolstered market sentiments to a certain degree. However, the EU’s new steel trade protection regulations officially took effect on July 1, which may have a negative impact on steel exports in the second half this year. Accordingly, market players have adopted cautious strategies to avoid potential risks. Meanwhile, extremely high temperatures have hit eastern China, which will slacken the demand for wire rod due to the anticipated reduction in construction activities. It is expected that wire rod prices in the Chinese domestic market will soften in the coming week.
Wire rod offer prices from Indonesia’s Dexin Steel are at $485/mt FOB for September shipment, which is down by $5/mt since last week. Some tonnages have been traded at this level and, even though the producer has increased its billet and slab prices by $5/mt since early this week, its wire rod quotations are stable now. “I see very weak seasonal demand, so prices are generally stable,” a Southeast Asian source said.
In Southeast Asia, some sales of Asian wire rod done in Southeast Asia have been heard at $510/mt CFR, slightly down from $515/mt CFR last week.
As of July 16, rebar futures at Shanghai Futures Exchange are standing at RMB 3,115/mt ($459/mt), increasing by RMB 24/mt ($3.5/mt) or 0.8 percent since July 9, while up 0.26 percent compared to the previous trading day, July 15.
$1 = RMB 6.7909
