Local Chinese longs prices rise a little more confidently amid property support news

As of September 4, average Chinese domestic rebar and wire rod prices have moved up further compared to August 28 mainly amid support for sentiments from the recent government policy measures to bolster the real estate market.

The average rebar price has increased by RMB 67/mt ($9.3/mt) compared to August 28, while the average 6.5 mm HPB 300 wire rod price has also seen a rise, of RMB 57/mt. Rebar prices have risen by RMB 27/mt ($3.8/mt) compared to last Friday.

During the given week, rebar and wire rod prices in the Chinese domestic market edged down first while moving up later, especially amid support from Chinese policymakers’ stimulus measures for the real estate industry.

For instance, the People’s Bank of China (PBOC) and China’s State Financial Supervision Authority (SFSA) have jointly issued a Notice on Matters Relating to the Reduction of Interest Rates for First Home Loans in Stock, stating that as of September 25 commercial banks in China will start dealing with applications for reductions in interest rates on first home loans which were issued to home buyers before August 31, 2023. Moreover, on September 1, Beijing and Shanghai followed other cities and announcing optimization of loan policies, signaling that those home buyers who want to improve their living conditions and buy a bigger home after selling their house could be eligible for lower interest rates and a lower downpayment ratio.

All of these moves for the real estate sector have exerted a positive impact on the demand for rebar and wire rod and bolstered their prices. Market players think the peak season of September and October may be characterized by a good performance. However, typhoons will negatively affect the demand for rebar and wire rod in eastern China and southern China. It is thought that rebar and wire rod prices in the Chinese domestic market will move from slightly up to sideways in the coming week.

On September 4, rebar futures contract (rb2210) offers closed at RMB 3,770/mt ($525/mt) at Shanghai Futures Exchange, increasing by RMB 103/mt ($14/mt) compared to August 28, while rising by 0.35 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 7.1786