Average offer prices for ex-China wire rod have moved on a downtrend over the past week, signaling that the situation in the export market for this product is critically bad even compared to semi-finished products.
Offers for ex-China wire rod from second-tier mills have been heard at $465-480/mt FOB, decreasing by $10/mt on average compared to February 20, while reference deal prices have been heard at $460-470/mt FOB, also down $10/mt compared to February 20.
During the given period, wire rod prices in the Chinese domestic market have fluctuated within a limited range amid slight decreases in rebar futures prices. Production of wire rod has increased slightly, while the apparent consumption has also increased, resulting in slight rises in inventory levels. However, the situation regarding supply and demand is better than in the same period last year, providing some support for wire rod prices. The demand from downstream users is expected to improve further as the traditional peak season is approaching. It is thought that wire rod prices in the Chinese domestic market will likely edge up in the coming week.
Wire rod offer prices from Indonesia’s Dexin have been heard at $480/mt FOB, increasing by $5/mt over the past week after a deal done at the previous level early this week. Moreover, it has been heard that offer prices of ex-Malaysia wire rod have been at $475-480/mt FOB, down from at least $490/mt FOB last week.
Buyers in the Philippines have made counteroffers at $470/mt CFR Manila, slightly higher than the previous deal at $465/mt CFR, but trading activity has been very weak as this level has been too low for most mills, except non-VAT traders. Buyers in Thailand have been looking for an even lower level at $460/mt CFR Bangkok.
As of February 27, rebar futures at Shanghai Futures Exchange are standing at RMB 3,329/mt ($464/mt), decreasing by RMB 29/mt ($4/mt) or 0.12 percent since February 20, while up 0.48 percent compared to the previous trading day, February 26.
$1 = RMB 7.174