Local Chinese longs prices inch down as supply still exceeds demand

As of September 11, average Chinese domestic rebar and wire rod prices have indicated declines compared to September 4. Even though property stimulus measures have been issued in China and demand has started to improve, though very slowly, production of steel has remained at high levels and so supply still exceeds demand.

The average rebar price has decreased by RMB 27/mt ($3.7/mt) compared to September 4, while the average 6.5 mm HPB 300 wire rod price has seen a decrease of RMB 30/mt. Rebar prices have risen by RMB 7/mt ($1.0/mt) compared to last Friday.

During the given week, rebar and wire rod prices in the Chinese domestic market edged up first while moving down later. The easing of the negative impact of the typhoon weather has contributed to the slightly improved demand for rebar and wire rod. At the same time, several stimulus policies have been issued, bolstering market sentiments. Demand has improved slightly but not to the level that market players had expected. Moreover, steel production has remained high, indicating a slight increase in the past week, after the decline seen in late August.

It is thought that rebar and wire rod prices in the Chinese domestic market may fluctuate within a limited range in the coming week.

On September 11, rebar futures contract (rb2401) offers closed at RMB 3,759/mt ($521/mt) at Shanghai Futures Exchange, decreasing by RMB 11/mt ($1.5/mt) compared to September 4, while rising by 0.05 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 7.2148