Average offer prices for ex-China wire rod have moved up over the past week amid increasing rebar futures and better sentiments after the supportive measures announced by the Chinese government. ASEAN mills have followed the upward trend and achieved deals at higher price levels.
Offers for ex-China wire rod from second-tier mills have been heard at $480-490/mt FOB, increasing by $15/mt on average compared to last week. The reference deal price from China has been at $480/mt FOB, also up by $15/mt week on week, though most mills are asking for $490/mt FOB at the lowest and the top-tier mills are asking for $500/mt FOB. At the moment, export trade has been limited due to the hike in prices, but over the past week deals at $465-470/mt FOB have been confirmed to distant markets.
During the given week, wire rod prices in the Chinese domestic market have indicated an increasing trend as downstream users have built up some stocks ahead of the long National Day holiday (October 1-7). Meanwhile, rebar futures prices have increased, bolstering market sentiments firmly. The People’s Bank of China’s announced that it will cut the reserve requirement ratio (RRR) for Chinese banks by 0.5 percentage points in the near future, positively affecting the wire rod market. It is thought that wire rod prices in the Chinese domestic market will likely move up further.
Wiree rod offer prices from Indonesia’s Dexin increased by $5/mt to $470/mt FOB early this week, while they have now reached $475-480/mt FOB, versus $465/mt FOB last week. An Indonesian mill has managed to sell at $478/mt FOB at the highest this week, according to market sources, though its overall sales volume has not been big.
Ex-Malaysia wire rod offers have been heard at $470-475/mt FOB, rising by $10-15/mt on average.
Import wire rod offer prices in Southeast Asia have hit $490-500/mt CFR this week, while the previous deal was done at $480/mt CFR.
As of September 26, rebar futures at Shanghai Futures Exchange are standing at RMB 3,281/mt ($466/mt), increasing by RMB 75/mt ($10.7/mt) or 2.3 percent since September 19, while up 1.05 percent compared to the previous trading day, September 25.
$1 = RMB 7.0354
