Local Chinese longs prices keep rising, typhoons may reduce demand in short term

As of July 31, average Chinese domestic rebar and wire rod prices have increased compared to July 24, supported by slightly better demand, lower supply in northern China, and positive expectations after the government announcement of support for the property market. However, the typhoons which started to hit China since late last week, may impact demand and prevent prices from recording further rises in the short term.     

The average rebar price has risen by RMB 43/mt compared to July 24, while the average 6.5 mm HPB 300 wire rod price has also seen an increase, of RMB 50/mt. Rebar prices have remained stable compared to last Friday.  

During the given week, rebar and wire rod prices in the Chinese domestic market have edged up amid the improved demand from downstream users. At the same time, market sentiments have been bolstered by Chinese policymakers’ determination to loosen the restrictions on the real estate sector and boost economic development. At the same time, since late last week typhoon Doksuri has negatively affected construction activities, exerting a negative impact on the rebar and wire rod market. The third round of rises in coke prices has provided support for rebar and wire rod prices, and the support from the raw material side is expected to continue. However, another typhoon, typhoon Khanun, will hit China in the coming few days, which will weaken the demand for rebar and wire rod. It is expected that rebar and wire rod prices in the Chinese domestic market will likely stay at unchanged levels or edge down slightly in the coming week.   

On July 31, rebar futures contract (rb2210) offers closed at RMB 3,847/mt ($540/mt) at Shanghai Futures Exchange, increasing by RMB 54/mt ($7.6/mt) or 1.4 percent compared to July 24, while increasing by 0.16 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 7.1305