Local Chinese longs prices down sharply, may be firm in short term

During the week ending August 23, average Chinese domestic rebar and wire rod prices have moved down sharply amid the decreasing rebar futures prices and the declining iron ore prices. Some demand revival has been seen in the local market recently and market players believe that prices will not post significant drops further in the coming week.

During the given period, the average rebar price has lost RMB 93/mt, while the average wire rod price has gained RMB 90/mt. Nevertheless, on Monday rebar prices have posted an increase by RMB 27/mt since Friday.

During the given week, local Chinese rebar and wire rod prices have decreased sharply amid the significant drops in rebar futures prices and iron ore prices. Market players’ sentiments have weakened, negatively affecting rebar and wire rod prices. However, there are expectations that the sharp decreases in rebar and wire rod prices have almost finished and prices will have to stabilize in the near future. Some demand improvement has been seen, in the eastern China in particular, as prices have fallen and the weather has been more suitable for construction. In northern China, gradual improvement in rebar trading has also been seen.

On August 23, rebar futures contract (2105) offers closed at RMB 5,102/mt ($785/mt) at Shanghai Futures Exchange, down RMB 226/mt ($35/mt) or by 4.24 percent compared to that recorded on August 16, signaling market players’ cautious sentiments towards the prospect for the future rebar market. At the same time, compared to the previous working day on Friday futures have added 1.55 percent or RMB 78/mt ($12/mt).

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 6.4969