Average offer prices for ex-China wire rod have moved sideways over the past week, but the outlook has improved after recently announced production cuts in China and some rises in futures prices.
Offers for ex-China wire rod from second-tier mills have been heard at $450-470/mt FOB, remaining stable on average compared to June 26, while reference deal prices have been heard at $445-460/mt FOB.
During the given week, wire rod prices in the Chinese domestic market have edged up amid increasing rebar futures prices. The Central Financial Committee (CFCC) of China held a meeting on July, stating that “in accordance with the law and regulations China will govern enterprises’ low-priced and unorganized competition, guide enterprises to improve product quality, and promote the orderly withdrawal of backward production capacity”. Market participants think this may result in a round of supply-side reforms, exerting a positive impact on market sentiments. Some sellers even suspended selling activities, aiming to wait for a better price. It is expected that wire rod prices in the Chinese domestic market will move up in the coming week.
Wire rod offer prices from Indonesia’s Dexin have been heard at $490/mt FOB, for delivery in September, remaining unchanged on average compared to June 26, while offer prices of ex-Malaysia SAE1006 wire rod have been heard at $480/mt FOB, also stable over the past week.
In Southeast Asia, mainstream deal prices of import 6.5 mm SAE1008 wire rod have been heard at $465-470/mt CFR. After some deals done at $460/mt CFR to the Philippines in late June, there have been no such low offers even for Chinese origin material.
As of July 3, rebar futures at Shanghai Futures Exchange are standing at RMB 3,076/mt ($430/mt), increasing by RMB 103/mt ($14.4/mt) or 3.5 percent since June 26, while up 1.45 percent compared to the previous trading day, July 2.
$1 = RMB 7.1523