During the week ending July 12, average Chinese domestic rebar and wire rod prices have moved up amid rising rebar futures prices as sentiment has been strongly supported by the required reserve ratio (RRR) cut in China.
During the given period, the average rebar price has gained RMB 280/mt, while the average wire rod price has gained RMB 247/mt.
On Monday, July 12, rebar prices have added RMB 140/mt or $22/mt since Friday, according to SteelOrbis.
On Friday, the People’s Bank of China issued a notice that the reserve ratio would be cut as of July 15, which bolstered market players’ sentiments. The lower RRR will support construction activity because around RMB 1 trillion to be released as a result to support economic growth.
During the given week, rebar and wire rod prices increased amid continuously rising rebar futures prices and more active transaction activities, though general demand from downstream users has not seen a significant improvement. More steelmakers implemented production cuts and near-term restrictions, while this situation may change in the coming week, which could result in more supply to the rebar and wire rod market.
It is expected that rebar and wire rod prices will move up in the coming week. In addition to the recent RRR cut, sentiment in the market may continue to be supported by expected steel production reductions of 30 percent, anticipated because of the government’s call to keep crude steel output in 2021 at a level not higher than last year in 2021.
On July 12, rebar futures contract (2105) offers closed at RMB 5,432/mt ($838.5/mt) at Shanghai Futures Exchange, up RMB 210/mt ($32.4/mt) or by 4.0 percent compared to July 5, signaling market players’ bullish sentiments as regards the future prospects for the rebar market.
Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.
Rebar prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price |
Weekly change |
Weekly change |
|
25 - HRB400 |
Beijing |
5,140 |
793.3 |
280 |
42.2 |
|
Guangzhou |
5,300 |
818.0 |
280 |
42.1 |
|
|
Shanghai |
5,170 |
798.0 |
280 |
42.2 |
|
|
Average price |
5,203.3 |
803.1 |
280 |
42.2 |
All prices include 13 percent VAT and all prices are ex-warehouse.
Wire rod prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Weekly change |
|
6.5 - HPB300 |
Beijing |
6,170 |
952.3 |
280 |
42.0 |
|
Guangzhou |
5,700 |
879.8 |
280 |
42.1 |
|
|
Shanghai |
5,440 |
839.6 |
180 |
26.7 |
|
|
Average price |
5,770.0 |
890.6 |
247 |
36.9 |
|
|
8 - HPB300 |
Beijing |
5,950 |
918.4 |
280 |
42.0 |
|
Guangzhou |
5,640 |
870.5 |
280 |
42.1 |
|
|
Shanghai |
5,390 |
831.9 |
180 |
26.7 |
|
|
Average price |
5,660.0 |
873.6 |
247 |
36.9 |
All prices include 13 percent VAT and all prices are ex-warehouse.
$1 = RMB 6.4695