Average offer prices for ex-China wire rod have moved up significantly in the past week amid surging iron ore prices, rising ferrous metal futures prices and prevailing bullish sentiments.
Offers for ex-China wire rod have been heard at $595-610/mt FOB, moving up by $37.5/mt compared to the previous week amid surging raw material prices. A deal has been reported for SAE1008 wire rod from a Chinese mill at the lower end of the range. “Bullish sentiments have prevailed among market players amid increasing raw material prices, while some steelmakers have suspended giving export offer prices,” an international trader said.
Offer prices of ex-Southeast Asia wire rod prices have been heard at $600-615/mt CFR Manila, while steelmakers there have also started to suspend giving offer prices as they maintain a wait-and-see stance in the current situation. Last week, prices were at $570-575/mt CFR Manila, and so the week-on-week increase has reached $30-40/mt in Southeast Asia.
On December 10, iron ore futures prices in the main contract (i2105) at Dalian Commodity Exchange rose by 6.76 percent from the previous days to RMB 971/mt ($148.2/mt), while import spot prices have exceeded $155/mt CFR, up by more than $19/mt over the past week. The sharp rises in iron ore prices have bolstered market players’ sentiments. During the given week, inventory of wire rod has declined, exerting a positive impact on prices. However, the demand in northern China has been very slack amid the cold weather, though demand in southern China has been better.
As of Thursday, December 10, rebar futures at the Shanghai Futures Exchange are standing at 3,866/mt ($617/mt), increasing by RMB 174/mt ($26.6/mt) or 4.5 percent since December 3, while increasing by 2.38 percent compared to the previous trading day.
$1 = RMB 6.5476