Average offer prices for ex-China wire rod have moved sideways compared to the previous week amid support from stock replenishments in the local market for the winter season, though the approach of the Chinese New Year holiday still exerts a negative impact.
Offers for ex-China wire rod have been heard at $630-660/mt FOB, moving sideways compared to the previous week. “Wire rod prices in the Chinese domestic market have gained support from downstream users’ stock replenishments for the winter, while the approaching Chinese New Year holiday will exert a negative impact on ex-China wire rod offer prices,” an international trader said.
One deal for ex-China SAE 1008 wire rod has been heard at $655/mt FOB China. In general, a number of mills are ready to deal at about $640/mt FOB, but overseas demand is weak due to the bearish outlook.
The offer prices of wire rod in Southeast Asia have been heard at $650-660/mt CFR from big mainstream Chinese steel mills, while private sector steel mills and traders have still been ready to deal at $610/mt CFR, in line with the deal price level reported last week. There has been a report of a position cargo sale at $605-610/mt CFR early this week.
Market players have mostly left for the holiday in northern China, while in southern China there were still some activities, though these activities will slacken in the near future. However, the worsening of the Covid-19 pandemic in China has negatively affected market players’ sentiments. It is thought that ex-China wire rod prices may decline further in the coming period.
As of Thursday, January 28, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,275/mt ($660/mt), decreasing by RMB 94/mt ($14.5/mt) or 2.15 percent since January 21, while declining by 1.7 percent compared to the previous trading day.
$1 = RMB 6.4845 (January 28)