Local Chinese longs prices decline, reduced supply gives some support

During the week ending June 28, average Chinese domestic rebar and wire rod prices have moved down amid slack demand during the traditional offseason. However, reduced supply ahead of July 1 is preventing prices from recording sharp drops.  

During the given period, the average rebar price in China has lost RMB 70/mt, while the average wire rod price has declined by RMB 67/mt.

However, today, June 28, rebar prices have recovered by RMB 13/mt, reflecting the lower supply seen in the market.  

During the given week, rebar and wire rod prices in China have edged down further amid the prevailing bearish sentiments. Downstream users have mostly held a wait-and-see stance, resulting in low transaction activities.

At the same time, more steelmakers implemented maintenance works, which may reduce the supply to the market. As the 100th anniversary of the founding of the Communist Party of China on July 1 is approaching, there will be more production restrictions, which will reduce supply of rebar and wire rod and bolster prices. However, sluggish demand in the traditional offseason will exert a negative impact on the rebar and wire rod market. It is thought that rebar and wire rod prices may edge down further or fluctuate within a limited range in the coming week.

On June 28, rebar futures contract (2105) offers closed at RMB 5,070/mt ($785/mt) at Shanghai Futures Exchange, up RMB 181/mt ($28/mt) or by 3.7 percent compared to June 21, signaling market players’ improved 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 6.4578