Local Chinese longs prices increase and outlook improves amid RRR cut

Monday, 18 April 2022 17:22:06 (GMT+3)   |   Shanghai
       

During the week ending April 18, average Chinese domestic rebar and wire rod prices have indicated an increasing trend even though the market is still affected by restrictions aimed at containing the latest Covid-19 wave. The outlook is also better as the government is taking measures to support lending.  

During the given period, the average rebar price in China has gained RMB 63/mt, while the average wire rod price has risen by RMB 63/mt. Rebar prices are RMB 10/mt higher than last Friday.  

During the given week, rebar and wire rod prices have moved up amid the rebounding trend of rebar futures prices. Though it is the traditional peak season for the steel industry, demand for rebar and wire rod has not improved as much as market players expected due to the ongoing negative impact of the Covid-19 pandemic.

The People’s Bank of China (PBC) will cut the required reserve ratio (RRR) for financial institutions by 0.25 percentage points as of April 25, as announced today, April 18, which will bolster market sentiment and will positively affect rebar and wire rod prices in the near future.

On April 18, rebar futures contract (rb2210) offers closed at RMB 5,063/mt ($794/mt) at Shanghai Futures Exchange, up RMB 196/mt ($30.7/mt) or by 4.03 percent compared to April 11.

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.  

Rebar prices in local markets

Spec. (mm) - Category

City

Price (RMB/mt)

Price 
($/mt)

Weekly change 
(RMB/mt)

Weekly change 
($/mt)

25 - HRB400

Beijing

5,070

795.2

100

14.3

Guangzhou

5,290

829.7

50

6.4

Shanghai

5,060

793.6

40

4.9

Average price

5,140.0

806.1

63

8.6

All prices include 13 percent VAT and all prices are ex-warehouse.

 Wire rod prices in local markets

Spec. (mm) - Category

City

Price

(RMB/mt)

Price ($/mt)

Weekly

change (RMB/mt)

Weekly change 
($/mt)

6.5 - HPB300

Beijing

6,140

963.0

100

14.0

Guangzhou

5,540

868.9

50

6.4

Shanghai

5,570

873.6

40

4.8

Average price

5,750.0

901.8

63

8.4

8 - HPB300

Beijing

5,920

928.5

100

14.1

Guangzhou

5,480

859.5

50

6.4

Shanghai

5,270

826.5

40

4.9

Average price

5,556.7

871.5

63

8.4

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 6.3763


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