Local Chinese rebar and wire rod prices move up slightly amid better sentiments  

During the week ending January 6, average prices of Chinese domestic rebar and wire rod have seen an overall slight increase, following a few weeks of downward movement. Though there has been no improvement from the demand side, overall sentiment has improved after the government’s announcement of new financial stimuli.

Rebar prices in China have added RMB 17/mt on average or $3.1/mt over the past week, reaching RMB 3,840/mt ($550.8/mt) ex-warehouse, while average wire rod prices have increased by RMB 13/mt or $2.7/mt.

Major Chinese steelmaker Jiangsu Province-based Shagang Group has kept its offer prices for high-speed wire rod, rebar and bar-in-coil stable for the January 1-10 period.

The People's Bank of China (PBC) has decided to lower the required reserve ratio for financial institutions by 0.5 percentage points as of January 6, 2020 (excluding finance companies, financial leasing companies and auto finance companies), exerting a positive impact on sentiment in the rebar and wire rod market. However, the New Year holiday negatively affected demand for rebar and wire rod, resulting in increases in inventory levels in the spot market. At the same time, approaching the Chinese New Year holiday, demand will likely slacken further. It is expected that rebar and wire rod prices in the Chinese domestic market will fluctuate within a limited range in the coming week.

Rebar futures increased as well in the past week. On January 6, rebar futures contract (2005) offers closed at RMB 3,559/mt ($510.5/mt) at Shanghai Futures Exchange, up by 0.4 percent since December 30.

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 6.9718