Local Chinese longs prices lose over $25/mt in one week

As of April 24, average Chinese domestic rebar and wire rod prices have moved down sharply compared to April 17 as demand has lacked strength and, also given the rapid declines in iron ore prices and the weak real estate data, sentiments have been very bearish.

The average rebar price has decreased by RMB 173/mt compared to April 17, while the average 6.5 mm HPB 300 wire rod price has declined by RMB 177/mt. Rebar prices have seen a drop of RMB 106/mt compared to last Friday.

During the given week, rebar and wire rod prices have decreased at a faster rate amid the weak data from the real estate industry and declining raw material prices. Ferrous metal futures prices have indicated big declines, resulting in prevailing bearish sentiments among market players. Currently, the profitability of steel per one metric ton is almost zero, and so steelmakers have decided to reduce their outputs. Moreover, the weather has not been very good recently, exerting a negative impact on construction activities, resulting in slacker demand for rebar and wire rod. At the same time, the continuous price decreases have contributed to losses on the traders’ side. As the Labor Day holiday (April 29-May 3) is approaching, a wait-and-see stance may prevail among market participants. It is thought that rebar and wire rod prices in the Chinese domestic market will continue their downtrend in the coming week.

On April 24, rebar futures contract (rb2210) offers closed at RMB 3,714/mt ($540/mt) at Shanghai Futures Exchange, decreasing by RMB 214/mt ($31.1/mt) or 5.45 percent compared to April 17, while declining by 3.61 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 6.8835