Local Chinese longs prices down $15-20/mt, outlook not so bad

As of March 27, average Chinese domestic rebar and wire rod prices have moved on a decreasing trend compared to March 20 due to insufficient demand, weaker sentiments and falling raw material prices. But the outlook for the near future is not so bad as consumption may gradually improve and the profitability of mills has been better recently with the sharp fall in iron ore prices.

The average rebar price has decreased by RMB 103/mt compared to March 20, while the average 6.5 mm HPB 300 wire rod price has declined by RMB 113/mt. Rebar prices have seen a drop of RMB 3/mt compared to last Friday.

During the given week, rebar and wire rod prices have decreased amid the declining trend in raw material prices and the prevailing cautious sentiments among market players. Currently, steelmakers’ profitability has been at relatively decent levels, and so they may not reduce their production. Meanwhile, demand for rebar and wire rod will likely improve to a certain extent. The inventory levels of rebar and wire rod will likely shift from decreases to rises in some regions, while overall inventory levels in the market will decline, which will bolster the rebar and wire rod market. It is expected that rebar and wire rod prices will fluctuate within a limited range in the coming week.

On March 27, rebar futures contract (rb2210) offers closed at RMB 4,105/mt ($597.5/mt) at Shanghai Futures Exchange, decreasing by RMB 89/mt ($13/mt) compared to March 20.

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 6.8714