Average offer prices for ex-China wire rod have moved sideways over the past week but, taking into account rises in rebar futures Chinese and ASEAN-based mills may consider to increase prices in the near future. Traders’ offers to Southeast Asia have already started to disappear, though many market sources are still doubtful about the prospects for a rebounding trend.
Offers for ex-China wire rod from second-tier mills and traders have been heard at $510-530/mt FOB, moving sideways compared to May 25. “During the given week, inventories of wire rod have decreased, signaling improved demand from downstream users in the local market in China. On June 1, rebar futures prices moved up by 2.84 percent compared to the previous trading day amid the big rise of 5.77 percent recorded in iron ore futures prices, which will exert a positive impact on market sentiment, though there are worries about the expected slackening of demand during the approaching hot summer season,” a trader said.
The reference import prices of wire rod in Southeast Asia stand at $530-550/mt CFR Manila, where the higher end of the range mainly corresponds to offers from Chinese mills, while the lower end represents buyers’ price ideas. Demand has been slack and so buyers have mostly purchased in small volumes. Last week, the reference import prices for wire rod in Southeast Asia were at $520-530/mt CFR Manila, with some Chinese offers at $530/mt CFR, but now such low offers are absent.
ASEAN-based mills are still assessing wire rod prices at $530-540/mt FOB from Indonesia and Malaysia, but no reports of sales or firm negotiations have been reported so far.
As of Thursday, June 1, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,546/mt ($500/mt), increasing by RMB 114/mt ($36.2/mt) or up 3.32 percent since May 25, while rising by 2.84 percent compared to the previous trading day (May 31).
$1 = RMB 7.0965