Rainy season starts to affect local Chinese rebar and wire rod market

During the week ending June 8, in the Chinese domestic market rebar and wire rod prices have generally indicated a decreasing trend, though wire rod prices in Shanghai have moved on a stable trend, while overall transaction activity in the domestic rebar and wire rod market has been lower than previous week, though remaining at decent levels. On June 8, rebar futures contract (1510) offers closed at RMB 2,224/mt ($376/mt) at Shanghai Futures Exchange, down $6/mt week on week. Average domestic rebar and wire rod prices in China's main markets can be viewed in the SteelOrbis price reports section.
 
During the given week, rainy weather in China has caused a slowdown in activity on construction sites, thereby resulting in reduced demand for rebar and wire rod, offsetting the support for long steel prices provided by iron ore prices.
 
The downtrend of finished steel prices will negatively affect iron ore prices, which will likely exert a negative impact on finished steel prices in turn. Meanwhile, with the arrival of the summer months, China will enter the offseason for rebar and wire rod consumption, especially in the regions in the middle and lower reaches of the Yangtze River, which will see a lot of rainfall. It is expected that rebar and wire rod prices in the Chinese domestic market will continue their downtrend in the coming week.