Average offer prices for ex-China wire rod have seen slight declines over the past week amid the still bearish local sentiment. However, seeing some interest in Europe, some ASEAN mills have managed to hike prices and sell some volumes, even though the tradable levels in the regional Southeast Asian market have remained low.
Offers for ex-China wire rod from second-tier mills have been heard at $455-470/mt FOB, decreasing by $5/mt on average compared to March 13, while reference deal prices have been heard at $450-460/mt FOB, also declining by $5/mt compared to March 13.
During the given week, inventory of wire rod has decreased amid the slowly improved demand from downstream users. Meanwhile, the production of wire rod has declined slightly, easing the supply pressure. However, the decreasing rebar futures prices have weakened the support for wire rod prices. It is thought that wire rod prices in the Chinese domestic market will likely rebound in the coming week amid the anticipated improvement of demand, but for now no change in trend has been seen in the local market.
Offer prices of ex-Indonesia wire rod have been heard at $490-495/mt FOB, for shipment in June, moving up significantly from $475/mt FOB two weeks ago. According to sources, up to 35,000 mt of Indonesian wire rod have been sold at the higher end of the range to Europe as “Europe is a hot market for Indonesian sellers at the moment,” a trader said. This deal price has not been confirmed by the time of publication but a number of sources confirmed this was the target level of the Indonesian mill specifically for Europe.
At the same time, counteroffers for ex-ASEAN wire rod on the part of buyers in Southeast Asia have dropped below $455/mt FOB. Market sources said that most imports in Southeast Asia have seen workable levels at $460-470/mt CFR.
As of March 20, rebar futures at Shanghai Futures Exchange are standing at RMB 3,176/mt ($443/mt), decreasing by RMB 80/mt ($6.6/mt) or 2.5 percent since March 13, while up 0.22 percent compared to the previous trading day, March 19.
$1 = RMB 7.1754