Local Chinese rebar and wire rod prices increase amid production restrictions

During the week ending July 26, average Chinese domestic rebar and wire rod prices have moved up amid the increasing rebar futures prices and production restrictions.  

During the given period, the average rebar price has gained RMB 90/mt, while the average wire rod price has gained RMB 93/mt.  

During the given week, rebar and wire rod prices in the Chinese domestic market edged up further, though the end-users demand has not seen significant improvement. Rebar futures prices moved up further, pushing up rebar prices in spot and improved transaction activities to traders, which are in a hurry to restock before more severe production cuts. The production restrictions were the major factor, bolstered rebar and wire rod prices in China, as a few provinces have already announced that they will cut crude steel production by at least 10 percent in H2.

Nevertheless, the flood in Henan and Hebei provinces and typhoon in Zhejiang and Shanghai will negatively affect the demand in the market in the near future so it is thought that rebar and wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

On July 26, rebar futures contract (2105) offers closed at RMB 5,687/mt ($879/mt) at Shanghai Futures Exchange, up RMB 255/mt ($39.4/mt) or by 4.7 percent compared to that recorded on July 19, signaling market players’ bullish sentiments towards the prospect for the future 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

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 6.4763