Average offer prices for ex-China wire rod have moved sideways over the past week amid limited fluctuations in the local market and relatively stable demand domestically. However, ASEAN-based mills have increased their official export wire rod prices after inspections started for non-VAT cargoes coming from China and so the low prices levels from traders may disappear in the near future.
Offers for ex-China wire rod from second-tier mills have been heard at $530-540/mt FOB, remaining stable on average, while reference deal prices have been heard at $520-530/mt FOB, if some small mills need to push volumes abroad.
In the Chinese domestic market, inventory of wire rod has decreased, exerting a positive impact on wire rod prices, while supply has been at relatively high levels, which may negatively affect wire rod prices in the near future. At the same time, import iron ore prices have moved up continuously, bolstering wire rod prices from the cost side. “Market players thinks downstream users may build up stocks ahead of the Labor Day holiday (May 1-5), which will provide some support for wire rod prices, I think some rises are possible, but limited,” an international trader said.
However, official offer prices of Indonesia’s Dexin wire rod have been heard at $525/mt FOB, and the lowest possible in negotiations is said to be $515-520/mt FOB and only for the Asian market, while last week offers were at $510-520/mt FOB and some deals were heard at the lower end of the range. Offer prices of ex-Malaysia wire rod have been heard at $525-530/mt FOB, versus $525/mt FOB last week, and offer prices of ex-Vietnam Hoa Phat have been heard at $530-540/mt FOB.
News reports about inspections of steel cargoes for export at a number of large Chinese ports have emerged this week and market sources are widely discussing the possibility of the limitation of non-VAT trading from China in the near future. Nevertheless, some traders are still offering cheap non-VAT cargoes, though buyers have taken a wait-and-see position, not willing to buy in such an uncertain market. Traders’ lowest offers for mainly Chinese wire rod have been at $525-535/mt CFR to the Philippines and Vietnam and at $530-540/mt CFR Thailand. The tradable level is assessed at $520-525/mt CFR Manila, up by $5/mt from the past week, but trading is almost halted.
As of April 25, rebar futures at Shanghai Futures Exchange are standing at RMB 3,669/mt ($517/mt), decreasing by RMB 13/mt ($1.8/mt) or 0.35 percent since April 18, while up 0.03 percent compared to the previous trading day, April 24.
$1 = RMB 7.1058
