Average offer prices for ex-China wire rod have edged down slightly over the past week, while major ASEAN mills have also decided to cut offers to achieve some deals before the start of the holiday silence. However, high raw material prices and not very high supply will prevent prices from further drop, according to market sources.
Offers for ex-China wire rod have been heard at $540-580/mt FOB, edging down by $5/mt on average due to the decline on low end compared to December 14. Several deals of ex-China wire rod have been heard at $555/mt FOB for the distant markets.
During the given week, demand for wire rod has been slack amid the extremely cold weather in China and the 6.2-magnitude earthquake hitting Gansu province. More steelmakers reduced their outputs, which resulted in the declining supply to the spot market, while both demand and supply have been in weak situation. “Cautious sentiments prevailed among market players, but raw materials are too high, so the market will stabilize,” a trader said.
Offer prices of ex-Indonesia and ex-Malaysia wire rod have been heard at $545-555/mt, FOB, moving down by $10/mt compared to that recorded on December 14. There were reports about ex-Indonesia wire rod have been heard dealt at $545/mt FOB in export market with the final destination is expected to be Europe.
In the import wire rod market in Southeast Asia, the reference price level has remained at $550-555/mt CFR with no activity seen.
As of Thursday, December 21, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,988/mt ($562/mt), increasing by RMB 63/mt ($8.9/mt) or up 1.6 percent since December 14, while increasing by 1.27 percent compared to the previous trading day (December 20).
$1 = RMB 7.1012
