Local Chinese longs prices down over past week, outlook bearish

During the week ending December 28, average Chinese domestic rebar and wire rod prices have moved down visibly amid the downward trend seen in rebar futures prices, while demand has been lower. Moreover, the outlook for the next month is also bearish.

Over the past week, the average rebar price has lost RMB 110/mt, while the average wire rod price has declined by RMB 60/mt.

During the given week, rebar futures prices moved up sharply at the beginning of the given week, while moving down in the latter part of the week, affecting rebar and wire rod prices in the spot market. Recently, due to the production halts in the winter season, the supply of rebar and wire rod has decreased, while it will likely increase as more steelmakers will resume production in the near future.

In China, most migrant workers will be off work in January, which will negatively affect construction activities and reduce demand for rebar and wire rod. Moreover, extremely cold weather is expected to hit China in the coming week, which will also exert a negative impact on the rebar and wire rod market. It is thought that rebar and wire rod prices in the Chinese domestic market will likely edge down in the coming week.

On December 28, rebar futures contract (2105) offers closed at RMB 4,244/mt ($651/mt) at Shanghai Futures Exchange, down RMB 216/mt ($33.1/mt) or by 0.7 percent compared to the previous trading day and down by 4.84 percent since December 21, signaling market players’ bearish sentiments as regards the prospects for the future rebar 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 6.5236