Ex-China wire rod prices up sharply amid good local demand, foreign buyers resist

Thursday, 21 May 2020 15:37:58 (GMT+3)   |   Shanghai
       

Offer prices for ex-China wire rod have moved up further amid good demand from downstream users in the local market, decreasing inventory levels and the rising trend of ferrous metal futures prices and raw material prices. Meanwhile, steelmakers in Tangshan have been ordered to implement production cuts for environmental protection purposes for the National People’s Congress (NPC) and The Chinese People’s Political Consultative Conference (CPPCC), reducing the supply to the market and also supporting wire rod prices. During the given week, booming infrastructure construction has provided solid support for demand for wire rod amid China’s measures to expand domestic demand.

SteelOrbis has been informed that Chinese mills’ export prices for wire rod have moved up by $15/mt over the past week to $450-460/mt FOB, following a slight rising trend in the previous week. Some Chinese traders have reported offers at $440-450/mt FOB, but this level has still been too high for customers. Offer prices of ex-Malaysia wire rod have been heard at $445/mt CFR Vietnam, while importers from the Philippines have said that overall demand has been weak and that the tradable value is not above $420/mt CFR. As SteelOrbis reported earlier, last week Indian and Indonesia wire rod was traded in Thailand and the Philippines at $415-420/mt CFR.

“Ex-China wire rod has been uncompetitive in the export market, and thereby buyers have held a wait-and-see stance,” a trader told SteelOrbis.

As of Thursday, May 21, rebar futures at the Shanghai Future Exchange are standing at RMB 3,568/mt ($503.5/mt), increasing by RMB 123/mt ($17.4/mt) or 3.6 percent since May 14.

$1 = RMB 7.0868


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