During the week ending April 26, average Chinese domestic rebar and wire rod prices have moved up sharply - by more than $25/mt - amid the hike in futures prices on Monday and stronger demand ahead of the Labor Day holiday. Moreover, strict short-term output cuts have been announced in Tangshan again.
The average rebar price has gained RMB 143/mt in the past week, while the average wire rod price has increased by RMB 173/mt, according to SteelOrbis’ data.
During the given week, rebar and wire rod prices have moved up sharply as rebar futures prices have hit a new record high and given the prevailing bullish sentiments among market players. Demand has improved compared to the previous week as the weather has been good for construction activities. This is the final week ahead of the Labor Day holiday (May 1-5), and so downstream users and traders are building up stocks, which will bolster rebar and wire rod prices.
Meanwhile, production restrictions will continue in Tangshan and Handan. Moreover, in addition to the overall restrictions, which are in place in Tangshan until the end of the year and in Handan for the second quarter, the local authorities in Tangshan have issued short-term restrictions to cope with increased emissions. As a result, all sintering machines in Tangshan will stop production from April 25 to April 27, while transportation of raw material and steel to and from ports will also be limited. The fresh restrictions will further reduce steel output and provide support for rebar and wire rod prices.
Market players have started to be cautious following the big rises seen in prices. However, it is thought that rebar and wire rod prices in the Chinese domestic market may indicate further slight increases.
On April 26, rebar futures contract (2105) offers closed at RMB 5,371/mt ($828/mt) at Shanghai Futures Exchange, up RMB 289/mt ($44.5/mt) or by 5.7 percent compared to April 19 and up by 2.34 percent compared to the previous trading day (April 25), signaling market players’ bullish sentiments as regards the future prospects for the rebar market.
Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.
Rebar prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price |
Weekly change |
Weekly change |
|
25 - HRB400 |
Beijing |
5,200 |
801.1 |
80 |
16.2 |
|
Guangzhou |
5,300 |
816.5 |
170 |
30.1 |
|
|
Shanghai |
5,230 |
805.7 |
180 |
31.5 |
|
|
Average price |
5,243.3 |
807.8 |
143 |
25.9 |
All prices include 13 percent VAT and all prices are ex-warehouse.
Wire rod prices in local markets
|
Spec. (mm) - Category |
City |
Price (RMB/mt) |
Price ($/mt) |
Weekly change (RMB/mt) |
Weekly change |
|
6.5 - HPB300 |
Beijing |
5,830 |
898.2 |
100 |
19.7 |
|
Guangzhou |
5,540 |
853.5 |
180 |
31.8 |
|
|
Shanghai |
5,620 |
865.8 |
240 |
41.0 |
|
|
Average price |
5,663.3 |
872.5 |
173 |
30.9 |
|
|
8 - HPB300 |
Beijing |
5,610 |
864.3 |
100 |
19.6 |
|
Guangzhou |
5,480 |
844.2 |
180 |
31.7 |
|
|
Shanghai |
5,590 |
861.2 |
240 |
41.0 |
|
|
Average price |
5,560.0 |
856.6 |
173 |
30.8 |
All prices include 13 percent VAT and all prices are ex-warehouse.
$1 = RMB 6.4913