Local Chinese longs prices down as demand falls, near-term outlook still bearish

As of August 7, average Chinese domestic rebar and wire rod prices have seen declines compared to last week as demand has as expected weakened due to adverse weather conditions, while futures prices have fallen and there is still an uncertain outlook for the near future.  

The average rebar price has declined by RMB 70/mt ($9.8/mt) compared to July 31, while the average 6.5 mm HPB 300 wire rod price has seen a decrease of RMB 53/mt, according to SteelOrbis’ data. Rebar prices have edged down by RMB 14/mt ($2/mt) compared to last Friday.  

During the given week, rebar and wire rod prices in the Chinese domestic market have moved down amid declining rebar futures prices and the prevailing bearish sentiments among market participants. Floods and the earthquake in northern China have negatively affected the demand for rebar and wire rod, and so sellers have mostly chosen to sell at lower prices to bring in cash and ease financial pressures. However, Chinese policymakers are determined to boost economic development by issuing stimulus measures, which may bolster the rebar and wire rod market to some extent and prevent prices from recording big declines. It is thought that rebar and wire rod prices in the Chinese domestic market will likely edge down further by slight margins in the coming week.   

On August 7, rebar futures contract (rb2210) offers closed at RMB 3,732/mt ($523/mt) at Shanghai Futures Exchange, decreasing by RMB 115/mt ($16.1/mt) or 3.0 percent compared to July 31, while declining by 0.53 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 7.138