Average offer prices for ex-China wire rod have moved up over the past week and low non-VAT offers have disappeared. The market outlook is rather positive.
Offers for ex-China wire rod have been heard at $460-470/mt FOB, increasing by $7.5/mt compared to December 11. The tradable prices have been heard at $455-465/mt FOB.
China’s Ministry of Commerce and the General Administration of Customs have jointly issued a notice announcing the introduction of an export license system for steel products, covering roughly 300 HS codes, which has exerted an impact on wire rod prices - non-VAT offers at below $460/mt FOB have disappeared from in the market. Meanwhile, the recent appreciation of the Chinese currency has also bolstered China’s wire rod export offer prices. Recently, inventories of wire rod in the Chinese domestic market have decreased, providing support for prices.
Moreover, on December 17, China’s National Development and Reform Commission (NDRC) announced that six departments, including the NDRC, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, the Ministry of Housing and Urban-Rural Development, the State Administration for Market Regulation, and the National Energy Administration, have released the Benchmark and Threshold Levels for Key Areas of Clean and Efficient Coal Utilization (2025 Edition). Accordingly, China’s coal industry will upgrade the benchmark levels for clean and efficient coal utilization by aligning with advanced domestic and international levels in the field. Coking coal and coke futures prices moved up by 6.07 percent and 5.39 percent on December 18, respectively, firmly bolstering steel prices.
It is thought that wire rod prices in the Chinese domestic market will likely edge up further in the coming week.
Wire rod offer prices from Indonesia’s Dexin have increased by $2/mt since last week to $467/mt FOB. Offer prices of ex-Malaysia SAE1006 wire rod have been heard at $470-480/mt FOB.
In Southeast Asia, offer prices of SAE1008 6.5 mm wire rod have been heard at $480/mt CFR and above. Even though buyers are still assessing the market levels at not above $465/mt CFR, such low offers have disappeared as they were mainly for non-VAT material.
As of December 18, rebar futures at Shanghai Futures Exchange are standing at RMB 3,125/mt ($443/mt), increasing by RMB 56/mt ($7.9/mt) or 1.8 percent since December 11, while up 1.4 percent compared to the previous trading day, December 17.
$1 = RMB 7.0583