Average offer prices for ex-China wire rods have moved down over the past week. Moreover, traders have been more active and have managed to sell to Southeast Asia as ex-China prices have become the most competitive in the region.
Offers for ex-China wire rod from mills have been heard at $560-590/mt FOB, down by $10/mt on average compared to September 22. But traders have been even more flexible, offering $580/mt CFR in Southeast Asia. Moreover, a few deals for ex-China wire rods were signed at $570/mt CFR Manila last week. “These were definitely sales in positions. I believe that after the Chinese holiday sellers may want to increase prices, so for buyers the prices now may be the lowest,” a local trader in the Philippines said.
At the same time, ex-ASEAN wire rod offers have been at $585/mt CFR, relatively stable from last week, which means that Indonesian and Malaysian wire rods have lost their leading positions and have no advantage against Chinese supplies at the moment.
“Supply of wire rod has decreased in the given week, while demand from downstream users has improved inside China, resulting in declines in inventory levels, while the repeated outbreaks of the Covid-19 pandemic may negatively affect the wire rod market,” an international trader said.
As of Thursday, September 22, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,836/mt ($539.5/mt), increasing by RMB 71/mt or up 1.9 percent since September 22, while rising by 0.13 percent compared to the previous trading day (September 28).
$1 = RMB 7.1102