Local Chinese longs prices remain under pressure of weak sentiment and demand

As of July 11, average Chinese domestic rebar and wire rod prices have edged down week on week, and since Friday there has also been decreases amid weak sentiment and no improvements in demand.

The average rebar price has decreased by RMB 93/mt week on week, while the average wire rod price has lost RMB 87/mt. Rebar prices have decreased by RMB 106/mt since Friday.

During the given week, rebar and wire rod prices edged down amid the declining rebar futures prices and the prevailing cautious sentiments among market players. The inventory levels of rebar and wire rod decreased, but this was connected mainly with the slowdown of production. At the same time, demand is unlikely to see significant improvement, which will weaken the support to longs prices. Following declines in raw material prices, steelmakers’ profitability is likely to improve, which will exert a positive impact on the rebar and wire rod market.

However, the repeated outbreaks of the Covid-19 pandemic may negatively affect the demand for rebar and wire rod. It is thought that rebar and wire rod prices may edge down slightly in the coming week.

On July 11, rebar futures contract (rb2210) offers closed at RMB 4,049/mt ($604/mt) at Shanghai Futures Exchange, down RMB 119/mt ($17.5/mt) or 2.85 percent compared to July 4.

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 6.696