Local Chinese longs prices decline as demand fails to improve

During the week ending January 25, average Chinese domestic rebar and wire rod prices have mostly moved down, though edging up in the Beijing market due to production cuts by local steelmakers.

Over the past week, the average rebar price in China has lost RMB 13/mt, while the average wire rod price has decreased by RMB 37/mt.

During the given week, most construction sites have started to halt work ahead of the New Year holiday, weakening demand for rebar and wire rod. Meanwhile, steelmakers’ capacity utilization rates have declined, bolstering rebar and wire rod prices to some extent. At the same time, the stricter control measures amid the worsening Covid-19 pandemic in China have exerted a negative impact on the rebar and wire rod market. However, stock replenishments during the winter season may still be seen in the near future, which will provide support for the rebar and wire rod market. It is thought that rebar and wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

On January 25, rebar futures contract (2105) offers closed at RMB 4,321/mt ($667/mt) at Shanghai Futures Exchange, down RMB 71/mt ($11/mt) or by 1.6 percent compared to January 18 and down by 0.25 percent compared to the previous trading day (January 24), signaling market players’ cautious sentiments as regards the future prospects for the rebar market.

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 6.4819