Average offer prices for ex-China wire rod have remained stable over the past week amid sluggish demand from downstream buyers due to the plum rainy season in eastern China, though supported by costs on the coke side. But since demand is likely to worsen further, a decline is possible in the near future.
Offers for ex-China wire rod have been heard at $500-515/mt FOB, remaining stable on average compared to June 11. The tradable prices are heard at $500/mt FOB at the lowest, mainly for the regional market.
During the given week, wire rod prices in the Chinese domestic market have seen slight declines amid decreasing rebar futures prices. Due to the plum rainy season in eastern China, demand for wire rod has been slack given the slowdown in construction activities, which has exerted a negative impact on prices. Bearish sentiments have started to prevail among market players, negatively affecting the wire rod market.
According to China's National Bureau of Statistics (NBS), in the January-May period this year, total real estate investments in China fell by 16.2 percent year on year, 2.6 percentage points faster than the decline recorded in the January-April period, reflecting the continuing weak performance of the real estate sector, which has negatively affected the demand for steel.
It is expected that wire rod prices in the Chinese domestic market will come under downward pressure in the coming week.
Wire rod offer prices from Indonesia’s Dexin Steel are at $500/mt FOB, down by $5/mt over the past week, reflecting extremely slow demand.
In Southeast Asia, mainstream tradable prices of 6.5 mm wire rod have been heard at $515-525/mt CFR.
As of June 18, rebar futures at Shanghai Futures Exchange are standing at RMB 3,131/mt ($464/mt), decreasing by RMB 25/mt ($3.7/mt) or 0.8 percent since June 11, while down 0.95 percent compared to the previous trading day, June 17.
$1 = RMB 6.813
