Average offer prices for ex-China wire rod have posted a small decline over the past week, while some market players suspended receiving orders in the export market amid the anticipated increases in freight costs and uncertainties in the market.
Offers for ex-China wire rod have been heard at $495-500/mt FOB, moving down by $2.5/mt compared to March 26. The tradable prices have been heard at $490/mt FOB at the lowest.
The ongoing geopolitical tensions in the Middle East have pushed up crude oil prices in the international market, while also increasing the transportation and production costs for commodities. Chinese domestic suppliers are worried about future costs and have suspended receiving orders from the export market. This may support prices in the near future, but some sources believe that prices may be stable on CFR basis, but can be corrected down on FOB basis in the current conditions.
During the given week, wire rod prices in the Chinese domestic market have mostly moved sideways, though edging up in Guangxi Province due to the production halt there. Rebar futures prices have moved down, exerting a negative impact on wire rod prices in the spot market. Meanwhile, major Chinese real estate developer Vanke has delivered its worst annual report on record, signaling the ongoing real estate downturn, which negatively affects the demand for wire rod. Market players are cautious as regards the future prospects for the wire rod market. It is thought that wire rod prices in the Chinese domestic market will likely move sideways in the coming week.
Wire rod offer prices from Indonesia’s Dexin Steel are at $520/mt FOB for June shipment today, moving down by $10/mt from early this week, but stable compared to last week. The producers managed to sell some volumes at $520/mt FOB this week in the regional market. Offer prices of ex-Malaysia SAE1006 wire rod have been heard at $510-520/mt FOB.
In Southeast Asia, mainstream tradable prices of 6.5 mm SAE1008 wire rod have been heard at $520-540/mt CFR, increasing by $10-15/mt on average over the past week. But the latest tradable level for Q195 wire rod from China has been heard at $505/mt CFR in the Philippines.
As of April 2, rebar futures at Shanghai Futures Exchange are standing at RMB 3,106/mt ($450/mt), decreasing by RMB 22/mt ($3.2/mt) or 0.7 percent since March 26, while down 0.67 percent compared to the previous trading day, April 1.
$1 = RMB 6.888
