Average ex-China wire rod offer prices have moved sideways over the past week amid slowing demand from downstream buyers on one side and firm support from coking coal and coke prices on the other. At the same time, there have been declines seen in Southeast Asia and some lower-priced short position offers have emerged.
Offers for ex-China wire rod have been heard at $500-515/mt FOB, moving sideways on average compared to June 4. At the same time, some non-VAT Chinese offers could be below the $500/mt FOB mark, sources said, based on levels seen in Southeast Asia.
Inventories on the traders’ and downstream users’ side in the ASEAN area have been sufficient, slowing down stocking replenishment activity and negatively affecting wire rod prices in overseas markets. At the same time, the weak performance at construction sites has curbed the demand for wire rod. However, the rises in coking coal and coke prices in China have bolstered ex-China wire rod offer prices firmly.
During the given week, wire rod prices in the Chinese domestic market have edged down amid slightly decreasing rebar futures prices. Demand for wire rod from downstream users inside China has been sluggish, resulting in prevailing cautious sentiments among market players. Most buyers have concluded purchases only as needed, exerting a negative impact on wire rod prices. Raw material prices have bolstered wire rod prices to a certain degree. On June 11, major Chinese steelmaker Shagang Group announced stable longs prices stable for June 11-20, providing support for wire rod spot prices. It is expected that wire rod prices in the Chinese domestic market will fluctuate within a limited range in the coming week.
Wire rod offer prices from Indonesia’s Dexin Steel are at $505/mt FOB for August shipment, down by $10/mt over the past week.
In Southeast Asia, some offers for Chinese 6.5 mm Q195/Q235B wire rod have been coming at $514-516/mt CFR to Vietnam and even slightly lower to the Philippines, indicating at least a fall of $5/mt over the past week.
As of June 11, rebar futures at Shanghai Futures Exchange are standing at RMB 3,156/mt ($464/mt), decreasing by RMB 1/mt ($0.15/mt) since June 4, while down 0.32 percent compared to the previous trading day, June 10.
$1 = RMB 6.815
