Local Chinese rebar and wire rod prices rise sharply, inventories drop

During the week ending November 18, average prices of Chinese domestic rebar and wire rod have moved up significantly, while transaction activity in the overall domestic rebar and wire rod market has been at medium levels.

On November 18, rebar futures contract (2001) offers closed at RMB 3,556/mt ($508/mt) at Shanghai Futures Exchange, up by RMB 183/mt ($26/mt) or 5.4 percent week on week. 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.

SteelOrbis has been informed that last week ex-China HRB400 grade 20 mm rebar export prices increased by $10/mt to $450-460/mt FOB, while Chinese wire rod export offer prices rose by $10/mt to $460-470/mt FOB.

During the given week, new rebar and wire rod supplies arriving in the market have been limited, while demand from downstream users has remained at good levels, resulting in a supply shortage and lower inventory levels. As a result, traders have been unwilling to sell and have sought to raise their prices. At the same time, China's central bank on November 15 initiated the second phase of a targeted reserve requirement ratio (RRR) cut for some city commercial banks and implemented a medium-term lending facility (MLF) to inject liquidity into the market, positively affecting market sentiment. It is expected that rebar and wire rod prices will likely continue their uptrend in the coming week, or will move sideways if demand weakens.

$1=RMB 7.004