Average offer prices for ex-China wire rod have remained stable over the past week. Since the demand for wire rod has been sluggish, the market is anticipated to soften in the near future, but any declines are expected to be small, as increased pressure from non-VAT export cargo inspections is expected from September.
Offers for ex-China wire rod have been heard at $470-490/mt FOB, moving sideways compared to August 14, while the second-tier mills have been offering at the lower end of the range and the large mills at the higher end of the range. The tradable prices have been heard at $465-480/mt FOB, but no lower offers are possible, even for non-VAT cargoes.
Demand from overseas markets has been slack, resulting in the prevailing cautious sentiments among market players. The appreciation of the Chinese currency has exerted a negative impact on exports. The production cuts in Tangshan, the major steelmaking hub in Hebei Province, have bolstered wire rod prices to a certain degree. However, the inventory of wire rod has increased, negatively affecting prices. It is thought that wire rod prices in the Chinese domestic market will likely edge down in the coming week amid the expected rise in inventories.
News about expected stronger controls of exports of non-VAT cargoes (mainly HRC and wire rod) emerged this week, with one vessel at Fangcheng Port (Guangxi, China) been stopped.
Wire rod offer prices from Indonesia have been heard at $490/mt FOB for October shipment, losing $5/mt over the past week.
Offer prices of ex-Malaysia SAE1006 wire rod have been heard at $490/mt FOB, moving sideways week on week, and offers of ex-Vietnam CB300V-D6 wire rod have been heard at $520/mt FOB, down $15/mt on average week on week.
In Southeast Asia, mainstream tradable prices of SAE1008 6.5 mm wire rod have been heard at $480-485/mt CFR, just slightly up from $480/mt CFR seen last week.