During the past week ending August 3, average Chinese domestic rebar prices have moved down amid the decreasing rebar futures prices and the ongoing slack demand from downstream users, less-than-expected support from the government, and falling raw material prices.
The average rebar price has decreased by RMB 57/mt ($8.4/mt) compared to July 27, while the average 6.5 mm HPB 300 wire rod price has also declined by RMB 57/mt ($8.4/mt). Rebar prices have decreased by RMB 17/mt ($2.5/mt) compared to the previous trading day, July 31.
During the given week, rebar and wire rod prices in the Chinese domestic market have moved on a downtrend. Steelmakers' losses have caused them to reduce rebar and wire rod outputs, while demand has slackened amid the high temperatures in the traditional summer off-season. Both supply and demand have declined, while inventories of rebar and wire rod have seen slight rises, and so the pressure on the rebar and wire rod market has not eased.
Two rounds of declines in coke prices have been implemented, weakening the support for rebar and wire rod from the cost side. Meanwhile, iron ore prices have moved on a downward trend, also exerting a negative impact on the rebar and wire rod market.
In addition, there have been weak signals coming from the Politburo meeting in China held late last week: no real supportive measures were announced for real estate or infrastructure for the remainder of this year, weaking support for steel market sentiments. “Mills will be cutting production even in September, I guess,” a Chinese source said.
It is expected that rebar and wire rod prices in the Chinese domestic market will continue to soften in the coming week.
As of August 3, rebar futures at Shanghai Futures Exchange are standing at RMB 2,976/mt ($438/mt), decreasing by RMB 102/mt ($15/mt) or 3.3 percent since July 27, while decreasing by 1.23 percent compared to the previous trading day, July 31.
Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.
Rebar prices in local markets
| Spec. (mm) - Category | City | Price (RMB/mt) | Price ($/mt) |
Weekly change (RMB/mt) |
Weekly change ($/mt) |
| 25 - HRB400 | Beijing | 3,050 | 449.2 | -80 | -11.7 |
| Guangzhou | 3,310 | 487.5 | -20 | -2.9 | |
| Shanghai | 3,030 | 446.2 | -70 | -10.2 | |
| Average price | 3,130.0 | 461.0 | -57 | -8.3 |
All prices include 13 percent VAT and all prices are ex-warehouse.
Wire rod prices in local markets
| Spec. (mm) - Category | City | Price (RMB/mt) |
Price ($/mt) | Weekly change (RMB/mt) |
Weekly change ($/mt) |
| 6.5 - HPB300 | Beijing | 3,640 | 536.1 | -100 | -14.6 |
| Guangzhou | 3,610 | 531.7 | -10 | -1.4 | |
| Shanghai | 3,510 | 516.9 | -60 | -8.8 | |
| Average price | 3,586.7 | 528.2 | -57 | -8.3 | |
| 8 - HPB300 | Beijing | 3,420 | 503.7 | -100 | -14.7 |
| Guangzhou | 3,550 | 522.8 | -10 | -1.4 | |
| Shanghai | 3,290 | 484.5 | -60 | -8.8 | |
| Average price | 3,420.0 | 503.7 | -57 | -8.3 |
All prices include 13 percent VAT and all prices are ex-warehouse.
$1 = RMB 6.7898
