Oversupply impacts local Chinese rebar and wire rod market

During the week ending May 23, Chinese domestic rebar and wire rod prices have continued their decreasing trends, while transaction activity in the domestic rebar and wire rod market has been at low levels. On May 23, rebar futures contract (1610) offers closed at RMB 1,947/mt ($297/mt) at Shanghai Futures Exchange, down $20/mt week on week. Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.

During the given week, although demand from construction sites has remained at normal levels, the domestic rebar and wire rod market is currently characterized by oversupply, dragging down rebar and wire rod prices in the spot market. Inventory levels of rebar and wire rod in the market have been increasing, and so rebar and wire rod prices will come under increased pressure in the coming period. In addition, as summer is approaching in China, demand for rebar and wire rod will be slacker, which will exert a negative impact on sentiment among market players. It is thought that rebar and wire rod prices in the Chinese domestic market will continue their downward trend in the coming week.

Wire rod prices in local Chinese market

All prices include 17 percent VAT and all prices are ex-warehouse
 
Rebar prices in local Chinese market

All prices include 17 percent

$1 = RMB 6.55