During the week ending March 16, average Chinese domestic rebar and wire rod prices have moved up visibly, following China’s measures to stimulate the resumption of production, while transaction activity in the overall domestic rebar and wire rod market has been better compared to the previous week.
Average rebar prices have increased by RMB 107/mt or $9.7/mt since last week, while wire rod quotations have gained RMB 110/mt. During the given week, inventory levels of rebar and wire rod has continued to increase, though at a slower pace, signaling the recovery of demand. Meanwhile, steelmakers’ outputs have risen slightly, and this rising trend will likely continue in the near future.
On March 16, rebar futures contract (2005) offers closed at RMB 3,553/mt ($507.4/mt) at Shanghai Futures Exchange, up RMB 114/mt ($16.3/mt) or by 3.3 percent since March 9, showing an overall upward movement, signaling market players’ optimistic view of the future prospects for the market amid better demand following China’s measures to boost the resumption of production.
Moreover, the People’s Bank of China (PBC), China’s central bank, has announced targeted required reserve ratio (RRR) cuts effective as of March 16, lowering the RRR for banks that satisfy criteria for lending more to smaller businesses by 0.5 to 1.0 percentage point, aiming to shore up the real economy and lower the actual costs of financing. In addition, eligible joint-stock commercial banks will enjoy an additional targeted RRR cut of 1.0 percentage point for giving more credit to non-financial sectors. The cuts in question will release RMB 550 billion ($78.6 billion) of long-term funds into the economy. The move will bolster sentiment in the steel market and boost demand for steel.
Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.
Rebar prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price |
Weekly change |
Weekly change |
|
25 - HRB400 |
Beijing |
3,430 |
489.9 |
120 |
12.0 |
|
Guangzhou |
3,840 |
548.4 |
60 |
2.6 |
|
|
Shanghai |
3,560 |
508.4 |
140 |
14.6 |
|
|
Average price |
3,610.0 |
515.6 |
107 |
9.7 |
All prices include 13 percent VAT and all prices are ex-warehouse.
Wire rod prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Weekly change |
|
6.5 - HPB300 |
Beijing |
4,270 |
609.8 |
120 |
10.6 |
|
Guangzhou |
3,910 |
558.4 |
60 |
2.5 |
|
|
Shanghai |
3,660 |
522.7 |
150 |
15.9 |
|
|
Average price |
3,946.7 |
563.6 |
110 |
9.7 |
|
|
8 - HPB300 |
Beijing |
4,050 |
578.4 |
120 |
11.0 |
|
Guangzhou |
3,850 |
549.8 |
60 |
2.6 |
|
|
Shanghai |
3,660 |
522.7 |
150 |
15.9 |
|
|
Average price |
3,853.3 |
550.3 |
110 |
9.8 |
All prices include 13 percent VAT and all prices are ex-warehouse.
$1 = RMB 7.0018