Local Chinese longs prices rise gradually, caution remains due to approaching typhoon

As of September 13, average Chinese domestic rebar and wire rod prices have moved up week on week, and have also increased slightly since last Friday. In general, optimism is still seen for September due to expected economic support, but the upcoming typhoon, which is expected to hit China this week, is making the near-term outlook more cautious. 

The average rebar price has risen by RMB 80/mt week on week, while the average wire rod price has increased by RMB 63/mt. Rebar prices have gained RMB 23/mt since Friday.

During the given week, rebar and wire rod prices have moved up amid improved demand from downstream users and increasing rebar futures prices. Meanwhile, inventory levels of rebar and wire rod have decreased amid slower production growth. Local governments in China may issue more policies to boost economic development as economic growth has been under enormous pressure, which may exert a positive impact on the demand for rebar and wire rod. However, Typhoon Muifa is going to hit the southeast coastal areas of China very soon, which will negatively affect construction activities. It is thought that rebar and wire rod prices in the Chinese domestic market may edge up slightly or fluctuate within a limited range in the coming week.

On September 13, rebar futures contract (rb2210) offers closed at RMB 3,794/mt ($550.7/mt) at Shanghai Futures Exchange, up RMB 103/mt ($15/mt) or 2.8 percent compared to September 6.

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 6.8928