Local Chinese longs prices decrease sharply due to weak demand

During the week ending November 8, average Chinese domestic rebar and wire rod prices have indicated sharp decreases amid declining rebar futures prices and the prevailing bearish sentiments among market players due to weakening demand.

During the given period, the average rebar price has lost RMB 327/mt, while the average wire rod price has also declined, by RMB 207/mt.  

During the given week, rebar and wire rod prices have continued to fall sharply amid slack demand and increasing inventory levels. Bearish sentiments have prevailed among market players, exerting a negative impact on rebar and wire rod prices. Some provinces’ power supply limitations have eased to a certain extent, with steelmakers resuming production in these regions, in Tangshan for instance, which will likely increase the supply of rebar and wire rod to the market in the short term. The weather is becoming colder and colder, which will slow down construction activities and weaken the support for rebar and wire rod prices. It is expected that rebar and wire rod prices in the Chinese domestic market will likely edge down further, though at a slower pace in the coming week.

On November 8, rebar futures contract (2201) offers closed at RMB 4,312/mt ($674/mt) at Shanghai Futures Exchange, down RMB 197/mt ($31/mt) or by 4.4 percent compared to November 1, signaling market players’ cautious sentiments towards the prospects for the future rebar and wire rod 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 6.3959