Local Chinese longs prices down further as demand worse than expected

As of September 5, average Chinese domestic rebar and wire rod prices have moved down again week on week. The week-on-week losses have amounted to over $15/mt as demand has remained slack or has worsened more despite expectations of some improvement.

The average rebar price has declined by RMB 87/mt week on week, while the average wire rod price has lost RMB 133/mt. Though rebar prices have gained RMB 10/mt since Friday, this has not been enough to change the overall weak market sentiments so far.

During the given week, rebar and wire rod prices have moved on an overall downtrend amid slacker demand than market players had expected. Meanwhile, production and inventory levels have increased further, exerting a negative impact on market sentiments. Currently, steelmakers are eager to produce as they expect better demand in September and October, while super typhoon Hinnamnor hit China and negatively affected downstream users’ construction activities. The weather will become better in the near future, which will favour an improvement in demand. It is thought that rebar and wire rod prices may fluctuate within a limited range in the coming week.

On September 5, rebar futures contract (rb2210) offers closed at RMB 3,691/mt ($535/mt) at Shanghai Futures Exchange, down RMB 70/mt ($10.1/mt) or 1.9 percent compared to August 29.

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 6.8998