Average offer prices for ex-China wire rod have edged up slightly over the past week amid the increasing iron ore prices and as suppliers have been expecting some improvements in the market in September. However, most market sources in Southeast Asia don’t see it as the start of the trend at the moment as overall fundamentals in the region have remained weak, demand is still slack and traders have been still offering at low levels.
Offers for ex-China wire rod from the second-tier mills have been heard at $520-540/mt FOB, edging up by $5/mt compared to August 17. “During the given week, inventory of wire rod decreased amid the improving demand from downstream users [locally], while continuous rising iron ore prices bolstered wire rod firmly. Market players expected for better demand as the traditional peak season of September and October is approaching, which will exert a positive impact on wire rod prices,” an international trader said.
Offer prices of ex-ASEAN wire rod from traders in position have been reported at $525/mt CFR, Southeast Asia, stable from that seen last week, while buyers were still expecting lower prices. At the same time, offer prices of ex-China wire rod have been heard at $530-545/mt CFR, the Philippines. The lower end of the range reflects the tradable non-VAT sales offers.
As of Thursday, August 24, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,688/mt ($513/mt), decreasing by RMB 38/mt ($5.3/mt) or down 1.0 percent since August 17, while decreasing by 1.23 percent compared to the previous trading day (August 23), showing that the fundaments have not improved much yet.
$1 = RMB 7.1886