As of August 28, average Chinese domestic rebar and wire rod prices have edged up slightly compared to August 21 amid hopes for the real estate support from the government and increase in construction steel demand as a result. However, taking into account that there will be a new wave of heavy rains in China and that steel production cuts have been very small, prices for longs will be under pressure and unlikely to post any big increases in the coming week.
The average rebar price has increased by RMB 17/mt ($2.4/mt) compared to August 21, while the average 6.5 mm HPB 300 wire rod price has also seen a rise of RMB 17/mt. Rebar prices have decreased by RMB 13/mt ($1.8/mt) compared to last Friday.
During the given week, rebar and wire rod prices in the Chinese domestic market have indicated slight rises as demand gradually improved as the traditional peak season of September and October is approaching. Meanwhile, the supply of rebar and wire rod has seen a slow downtrend, bolstering their prices to a certain degree. At the same time, favorable policies have been issued to boost the stock market, which will exert a positive impact on market players’ sentiments in the future. On Friday, the Chinese government approved guidance for affordable housing construction, while at the same day China's PBOC announced new relaxing residential housing loan rules, which is aimed to bolster sales in the real estate, which has been falling this year.
However, there are three typhoons—Saola, Haikui and Damrey, which will negatively affect construction activities in China due to the heavy rainfalls in the coming week. It is expected that rebar and wire rod prices in the Chinese domestic market may fluctuate within a limited range in the coming week.
On August 28, rebar futures contract (rb2210) offers closed at RMB 3,667/mt ($510/mt) at Shanghai Futures Exchange, increasing by RMB 1/mt ($0.14/mt) compared to August 21, while declining by 1.27 percent compared to the previous trading day.
Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.
Rebar prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price |
Weekly change |
Weekly change |
|
25 - HRB400 |
Beijing |
3,630 |
505.1 |
20 |
3.7 |
|
Guangzhou |
3,930 |
546.9 |
10 |
2.4 |
|
|
Shanghai |
3,690 |
513.5 |
20 |
3.7 |
|
|
Average price |
3,750.0 |
521.8 |
17 |
3.3 |
All prices include 13 percent VAT and all prices are ex-warehouse.
Wire rod prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Weekly change |
|
6.5 - HPB300 |
Beijing |
4,310 |
599.8 |
30 |
5.3 |
|
Guangzhou |
4,270 |
594.2 |
20 |
3.9 |
|
|
Shanghai |
4,240 |
590.0 |
0 |
1.1 |
|
|
Average price |
4,273.3 |
594.7 |
17 |
3.4 |
|
|
8 - HPB300 |
Beijing |
4,130 |
574.7 |
30 |
5.2 |
|
Guangzhou |
4,210 |
585.9 |
20 |
3.8 |
|
|
Shanghai |
3,940 |
548.3 |
0 |
1.0 |
|
|
Average price |
4,093.3 |
569.6 |
17 |
3.3 |
All prices include 13 percent VAT and all prices are ex-warehouse.
$1 = RMB 7.1856