Local Chinese longs prices decrease slightly amid slack demand

As of December 4, average Chinese domestic rebar and wire rod prices have moved down slightly compared to last week as domestic demand has softened due to seasonal factors, while futures prices have declined.

The average rebar price has decreased by RMB 30/mt ($4.2/mt) compared to November 27, while the average 6.5 mm HPB 300 wire rod price has seen a decline of RMB 27/mt ($3.8/mt). Rebar prices have decreased by RMB 7/mt compared to Friday, December 1.

During the given week, rebar and wire rod prices in the Chinese domestic market have moved on a downtrend amid decreasing rebar futures prices. Demand for rebar and wire rod has been slack as the weather has become cold, negatively affecting construction activities. Inventory levels of rebar have started to rise, which will exert a negative impact on rebar and wire rod prices in the near future, though the relatively high levels of raw material prices have bolstered longs prices from the cost side. It is expected that rebar and wire rod prices in the Chinese domestic market will continue to edge down in the coming week, but the decrease may be very limited as steel production will decline following the recent level II emergency responses to alleviate pollution.

On December 4, rebar futures contract (rb2401) offers closed at RMB 3,871/mt ($545/mt) at Shanghai Futures Exchange, decreasing by RMB 88/mt ($12.4/mt) or 2.2 percent compared to November 27, while decreasing by 1.17 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

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 7.1011