Local Chinese longs prices rise amid output cut rumors, stocks decline

During the past week ending April 28, average Chinese domestic rebar and wire rod prices have moved up amid increasing rebar futures prices, especially today, Monday, amid new talk of steel production cuts this year.

The average rebar price has increased by RMB 57/mt ($7.9/mt) compared to April 21, while the average 6.5 mm HPB 300 wire rod price has risen by RMB 60/mt ($8.3/mt). Rebar prices have increased by RMB 47/mt ($6.5/mt) compared to the previous trading day, April 25.

During the given week, rebar and wire rod prices have increased amid increasing rebar futures prices. Rumors about crude steel output reductions have strongly boosted market sentiments. Rumors in the market indicate that steelmakers with capacities exceeding 10 million mt will be required to cut crude steel output by 300,000 mt per month this year, while those steelmakers with capacities lower than 10 million mt be required to reduce crude steel output by 100,000 mt per month, with the aim to reduce China’s overall crude steel output by 50 million mt in 2025. However, the relevant authorities dispelled the rumors later, resulting in more cautious sentiments among market players. Meanwhile, inventory levels of rebar and wire rod have fallen further, exerting a positive impact on prices. Since the Labor Day holiday (May 1-5) is approaching, there will be some replenishment of rebar and wire rod stocks, which will positively affect prices. It is thought that rebar and wire rod prices in the Chinese domestic market will edge up in the coming period. 

As of April 28, rebar futures at Shanghai Futures Exchange are standing at RMB 3,129/mt ($432/mt), increasing by RMB 16/mt ($2.2/mt) or 0.5 percent since April 21, while up 0.61 percent compared to the previous trading day, April 25.  

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 7.2043