Mood weakens in China’s wire rod export market, relatively high iron ore prices provide support

Thursday, 31 December 2020 15:06:42 (GMT+3)   |   Shanghai
       

Average offer prices for ex-China wire rod have moved sideways amid the relatively high levels of iron ore prices. Nevertheless, some mills and traders have started to voice much lower offers, trying to attract foreign customers because sentiment in the local market in China has worsened.

Offers for ex-China wire rod have been heard at $640-670/mt FOB, moving sideways compared to the previous week amid the relatively high levels of raw material prices. “The Christmas holiday and the approaching New Year holiday have exerted a negative impact on China’s wire rod exports, and so buyers have been willing to buy at lower prices,” an international trader said.

Steel mills in Southeast Asia have not given offer prices for wire rod due to the holidays this week as they have mostly held a wait-and-see stance and may give offer prices after the New Year holiday. 

Local wire rod prices have declined slightly amid the prevailing bearish sentiments among market players. Though mainstream ex-China wire rod offer prices have been heard at $640-670/mt, there have been much cheaper offer prices of $590-600/mt heard from Tangshan-based mills. A few deals have been heard at $590-600/mt CFR the Philippines. Rebar futures prices in China moved up by 3.32 percent on December 31, signaling market players’ positive expectations as regards the prospects for the new year. 

As of Thursday, December 31, rebar futures at the Shanghai Future Exchange are standing at 4,388/mt ($672.5/mt), increasing by RMB 97/mt ($15/mt) or 2.26 percent since December 24, while increasing by 3.32 percent compared to the previous trading day.

$1 = RMB 6.5249


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