Average offer prices for ex-China wire rod have risen over the past week amid the increasing trend of rebar futures prices. At the same time, ASEAN-based mills have cut their export offers to accelerate sales, becoming more competitive.
Offers for ex-China wire rod from Tangshan mills have been heard at $530-540/mt FOB, up by $5/mt compared to June 29.
“During the given week, wire rod prices in the Chinese domestic market have moved sideways, while demand from downstream users has been slack and inventory levels have indicated rises. Supply of wire rod has been sufficient, also exerting a negative impact on prices, so export prices were supported only by futures gains, not by fundamentals,” an international trader said.
The hot summer weather has affected buyers’ sentiments in the Southeast Asian market. Currently, offer prices of ex-Indonesia wire rod are standing at $525-530/mt FOB, down by $10-15/mt from offers in late June. The main Malaysian seller has voiced offers at $535-540/mt FOB versus $550/mt FOB last week. “There are negotiations in distant markets after the price drop, but in Asia ASEAN wire rod also could be workable if someone needs to buy,” a trader said.
Chinese traders have been offering both China and ASEAN origin wire rods at $545-550/mt CFR Southeast Asia, down from $550-570/mt CFR last week, while inventory levels on the buyers’ side have been quite sufficient, and so buyers in the Philippines have given counter-offers at levels $10-20/mt lower.
As of Thursday, July 6, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,758/mt ($522/mt), increasing by RMB 35/mt ($4.9/mt) or up 0.9 percent since June 29, while rising by 0.11 percent compared to the previous trading day (July 5).
$1 = RMB 7.2098