Ex-China wire rod have posted gradual declines over the past week, but, unlike the previous weeks, the outlook has become more negative and, with softening raw material prices, buyers will insist on lower wire rod prices in new negotiations.
Offers for ex-China wire rod have been heard at $485-495/mt FOB, down $7.5/mt on average compared to April 2. The tradable prices are heard at $485-490/mt FOB. Though early this week some big mills were targeting $500-505/mt FOB, these levels now appear too high and not to reflect the real market conditions, according to sources.
During the given week, rebar futures prices have moved down, exerting a negative impact on wire rod prices in the spot market. Market inquiry activity was subdued, resulting in poor trading performance. Iron ore prices have decreased, weakening the support to wire rod prices to a certain degree. The short-term suspension of the war in Middle East on April 8 bolstered the financial markets, while the uncertainties in the area still negatively affected market sentiments. It is thought that wire rod prices in the Chinese domestic market will likely soften in the coming week.
Wire rod offer prices from Indonesia’s Dexin Steel have lost $10/mt since early this week, coming to $520/mt FOB, which is stable compared last Thursday. The mill is still offering wire rod for June shipment, and it seems that “they wanted to increase prices on sentiments, but they are not that good, at least for billet and wire rod,” an Asian trader said. Offer prices of ex-Malaysia SAE1006 wire rod have been heard at $510-520/mt FOB.
In Southeast Asia, mainstream tradable prices of 6.5 mm SAE1008 wire rod have been heard at $520/mt CFR or above, moving sideways on average over the past week. But for Q195 wire rod from China, buyers want $500-510/mt CFR.
As of April 9, rebar futures at Shanghai Futures Exchange are standing at RMB 3,096/mt ($449/mt), decreasing by RMB 10/mt ($1.4/mt) or 0.3 percent since April 2, while down 0.42 percent compared to the previous trading day, April 8.
$1 = RMB 6.8649
