Local Chinese longs relatively stable, hopes for rebound despite weak response to PBOC move

As of August 21, average Chinese domestic wire rod prices have edged down slightly compared to August 14, while rebar prices have remained stable. Nevertheless, in general price fluctuations have been limited over the past week, though some hopes for a gradual rebound have started to emerge. 

The average rebar price has remained stable compared to August 14, while the average 6.5 mm HPB 300 wire rod price has seen a slight decrease of RMB 3/mt. Rebar prices have decreased by RMB 24/mt ($3.3) compared to last Friday. 

During the given week, rebar and wire rod prices in the Chinese domestic market have fluctuated within a limited range amid the better market situation, for instance, the recovery in northern China amid the easing impact from recent heavy rainfalls. At the same time, steelmakers are expected to control outputs, which has bolstered rebar and wire rod prices due to the supply side expectations. Moreover, the People’s Bank of China (PBOC) announced a cut in the one-year loan prime rate (LPR) by 10 basis points to 3.45 percent, while keeping the five-year LPR stable at 4.2 percent, though the move is not as strong as market players had expected. It is thought that rebar and wire rod prices in the Chinese domestic market may edge up in the coming week.  

On August 21, rebar futures contract (rb2210) offers closed at RMB 3,666/mt ($509/mt) at Shanghai Futures Exchange, increasing by RMB 25/mt ($3.5/mt) or 0.7 percent compared to August 14, while declining by 1.4 percent compared to the previous trading day.  

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 7.1987