Average offer prices for ex-China wire rod have seen slight rises over the past week amid improvements in the local market. But ASEAN mills have held offers stable after the previous increase, and overall trading of ex-Asia wire rod has remained limited as buyers have not been ready to accept any rise.
Offers for ex-China wire rod from second-tier mills have been heard at $450-470/mt FOB, rising by $5/mt on average compared to May 8, while large mills have been asking for a minimum of $480/mt FOB.
The reserve requirement ratio (RRR) cut for Chinese banks by 0.5 percentage points has become effective as of today, exerting a positive impact on market sentiments. At the same time, on May 12, the US-China trade negotiations made substantial progress, supporting rises in wire rod prices. Rebar futures prices have moved on an uptrend, bolstering wire rod prices to a certain degree. At the same time, there is limited supply of wire rod to the spot market, also providing support for prices. It is thought that wire rod prices in the Chinese domestic market will likely edge up in the coming week.
In Southeast Asia’s import market, offers mainly for Chinese Q195 wire rod have been reported at $480-490/mt CFR this week, but buyers have still been asking for $470/mt CFR at the highest.
Wire rod offer prices from Indonesia’s Dexin have been heard at $520/mt FOB, for September shipment, moving sideways compared to May 8, while offer prices of ex-Malaysia and ex-Vietnam wire rod have been heard at $500/mt FOB and $505/mt FOB, respectively, remaining stable on average compared to May 8.
As of May 15, rebar futures at Shanghai Futures Exchange are standing at RMB 3,118/mt ($433/mt), increasing by RMB 66/mt ($9.2/mt) or 2.2 percent since May 8, while up 0.39 percent compared to the previous trading day, May 14.
$1 = RMB 7.1963