Local Chinese longs prices edge up as weak demand offset by economic stimuli

As of November 28, average Chinese domestic rebar and wire rod prices risen slightly week on week, and since last Friday there have been slight rises. In general, the market has been showing signs of stability as some negative factors such as demand concerns in the traditional offseason have been offset somewhat by the government’s monetary policy.

The average rebar price has increased by RMB 10/mt week on week, while the average wire rod price has gained RMB 7/mt, according to SteelOrbis’ data. Rebar prices have risen by RMB 7/mt since last Friday.

During the given week, rebar and wire rod prices have edged up slightly, though the repeated outbreaks of the Covid-19 pandemic and slack demand have negatively affected the market. However, the People’s Bank of China (PBC) is scheduled to cut the required reserve ratio (RRR) for financial institutions by 0.25 percentage points as of December 5, which will exert a positive impact on the rebar and wire rod market. As cold weather is expected to hit China, demand for rebar and wire rod will likely slacken. It is expected that rebar and wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

On November 28, rebar futures contract (rb2210) offers closed at RMB 3,738/mt ($522/mt) at Shanghai Futures Exchange, up RMB 67/mt ($9.4/mt) or 1.83 percent compared to November 21.

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 7.1617