The Asian wire rod market will see a change in the near future as the gap between Chinese and ASEAN prices is expected to rise, with a wider gap already being seen. Also, at the moment, there are two different trends: Chinese second-tier mills have become the most competitive in Asia, being more or less flexible at a time when non-VAT offers have disappeared from the market after new tax regulations. At the same time, ASEAN mills have all been targeting distant markets like Europe, keeping their offers very high.
Offers for ex-China wire rod from the second-tier mills have been heard at $460-470/mt FOB, decreasing by $2.5/mt on average compared to March 27. The reference deal prices have been heard at $455-460/mt FOB, down also by $2.5/mt. And while previously some non-VAT offers could be found at $440-445/mt FOB, at the moment they are gone. Large Chinese mills are offering at $480/mt FOB.
During the given week, demand for wire rod has been slack as the Tomb Sweeping Day holiday is approaching, exerting a negative impact on prices. The US has raised tariffs on all its trading partners on the basis of the so-called “reciprocal” principal, severely weakening market sentiments. The impact of these reciprocal tariffs needs to be observed further after the holiday. It is thought that wire rod prices in the Chinese domestic market will likely edge down in the coming week.
Wire rod offer prices from Indonesia’s Dexin have been heard at $495-500/mt FOB depending on the destination, up by $5/mt on average over the past week, as the mill can offer now only for July shipment and is targeting a higher level. Also, Vietnamese mills, targeting distant markets like Europe, have voiced prices at $530-550/mt FOB.
At the same time, in Southeast Asia’s import market, the tradable level has been reported at $470-475/mt CFR, while the previous deals, when non-VAT material from China was available were done at $460-470/mt CFR.
As of April 3, rebar futures at Shanghai Futures Exchange are standing at RMB 3,164/mt ($441/mt), decreasing by RMB 44/mt ($6.1/mt) or 1.4 percent since March 27, while down 0.19 percent compared to the previous trading day, April 2.
$1 = RMB 7.1889