Average offer prices for ex-China wire rod have moved up since late December, supported by gains in the local market and higher raw material costs. Moreover, the outlook for the near future is also positive.
Offers for ex-China wire rod have been heard at $465-480/mt FOB, moving up by $5-10/mt compared to December 25. The tradable prices have been heard at $460-470/mt FOB. There are still no offers for non-VAT wire rod, and the previous contracts done at lower prices for delivery in January-February are likely to be re-negotiated, according to market sources.
During the given period, wire rod prices in the Chinese domestic market have seen rises amid increasing rebar futures prices and increases in other ferrous metal futures prices. Following sharp rises of 7.98 percent in coking coal and coke futures prices seen on January 7, they indicated increases of 4.75 percent and 2.56 percent on January 8, providing solid support for wire rod prices from the cost side. Meanwhile, some traders in the wire rod market have been unwilling to sell for export as they prefer to bolster their prices and sell locally.
Moreover, following the New Year holiday, the stock market in China have indicated increases, positively affecting market sentiments. It is thought that wire rod prices in the Chinese domestic market will likely increase in the coming week.
Wire rod offer prices from Indonesia’s Dexin have increased to $480/mt FOB for March shipment, while they were at $465-470/mt FOB in late December. Offer prices of ex-Malaysia SAE1006 wire rod are at $490/mt FOB at the lowest.
In Southeast Asia, mainstream offer prices of SAE1008 6.5 mm wire rod have been heard at $485-490/mt CFR and some are as high as $495/mt CFR. But buyers are reluctant to accept such high levels, seeing the tradable levels at $470-475/mt CFR, which are not available at the moment.
As of January 8, rebar futures at Shanghai Futures Exchange are standing at RMB 3,168/mt ($451/mt), increasing by RMB 41/mt ($5.8/mt) or 1.3 percent since December 25, while up 0.44 percent compared to the previous trading day, January 7.
$1 = RMB 7.0197
