Average offer prices for ex-China wire rod have moved sideways over the past week amid rather stable local market and as the market awaits for the previous increase to be absorbed by the buyers first.
Offers for ex-China wire rod have been heard at $460-470/mt FOB, moving sideways compared to that recorded on December 18. The tradable prices have been heard at $455-465/mt FOB.
Following previous declines in coke prices, the rumor in the market said there will be the fourth round of price decline by the end of December, which will further weaken the support to wire rod prices from cost side. Since the New Year holiday is approaching, demand for wire rod from downstream users has been quiet, exerting a negative impact on its prices. Steelmakers held an optimistic attitude as regards the future prospects for the wire rod market, while buyers have been cautious in concluding purchases, showing a divergence between buyer and seller. It is expected that wire rod prices in the Chinese domestic market might fluctuate within a limited range in the coming week.
Wire rod offer prices from Indonesia’s Dexin have been heard at $467/mt FOB, stable from last week, while the tradable level for ex-Malaysia SAE1006 wire rod have been heard at $470-480/mt FOB, while sellers target as much as $480-490/mt FOB.
In Southeast Asia, mainstream offer prices of SAE1008 6.5 mm wire rod have been heard at $480-485/mt CFR, but negotiations could be held at $7/mt lower, according to market sources. Since there have been a lack of non-VAT offers in the market, the previous buyers targets of $460-465/mt CFR are not realistic at the moment.
As of December 25, rebar futures at Shanghai Futures Exchange are standing at RMB 3,127/mt ($444/mt), increasing by RMB 2/mt ($0.28/mt) or 0.06 percent since December 18, while up 0.03 percent compared to the previous trading day, December 24.
$1 = RMB 7.0392
