Local Chinese longs prices only change slightly as sentiment improves

During the week ending January 4, average Chinese domestic rebar and wire rod prices have fluctuated within a limited range after the decline seen in the previous week. Early in the given week, prices were under pressure from reduced demand due to seasonal factors, but on Monday, January 4, sentiment has improved, supported by some restocking and higher futures prices.

Over the past week, the average rebar price has gained RMB 10/mt, while the average wire rod price has risen by RMB 3/mt.

During the given week, extremely cold weather hit China, weakening the demand for rebar and wire rod. Meanwhile, rebar futures prices declined in the first part of the given week, exerting a negative impact on the spot market. Steelmakers have carried out more maintenance works approaching the Chinese New Year holiday (February 11-17), but some of them resumed normal production after repairs and they are seeing demand in eastern and southern China.

On January 4, rebar futures contract (2105) offers closed at RMB 4,383/mt ($670/mt) at Shanghai Futures Exchange, up RMB 139/mt ($22.3 /mt) or by 3.3 percent compared to December 28 and up by 1.79 percent compared to the previous trading day (December 31, 2020), signaling market players’ improved sentiments as regards the future prospects for the rebar market.

The improved sentiment has been driven by some restocking by local customers after a pause last week, but the future market development is unclear at the moment as another round of extremely cold weather will hit China again in the near future, which may negatively affect demand for rebar and wire rod.

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 6.5408