Local Chinese longs prices start to soften after gradual rise since late March

During the week ending April 11, average Chinese domestic rebar and wire rod prices have indicated an increase. But since late last week, they have softened a little, reacting to the expected improvement in supply after the lifting of Covid-19 restrictions from this week.

During the past two weeks, the average rebar price has gained RMB 40/mt, while the average wire rod price has risen by RMB 57/mt. At the same time, the rebar average price is just RMB 7/mt higher than one week ago and is down RMB 40/mt since last Friday.  

Rebar and wire rod prices were moving up since late March amid rising raw material prices and limited supply. However, the uncertainty due to the Covid-19 pandemic resulted in financial tightness among downstream users, and so lower supply was seen together with limited demand. Though market players are worried about demand in the near future, supply in the rebar market is going to revive from this week as the lockdown in Tangshan is lifted. It is expected that rebar and wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

On April 11, rebar futures contract (rb2210) offers closed at RMB 4,867/mt ($765/mt) at Shanghai Futures Exchange, down RMB 254/mt ($39.9/mt) or by 4.95 percent compared to April 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 6.3645