Southeast Asian wire rod suppliers have decided to increase their prices to the Philippines and Thailand, the major import markets in the region lately, as competition has been reduced. Most Chinese exporters have preferred to stay out of the market, waiting for the expected export tax rebar cut announcement, while the rare offer prices left in the market have been uncompetitive.
Offers from the major Southeast Asian sellers from Vietnam, Indonesia and Malaysia have increased to $690-700/mt CFR, while they were not above $690/mt CFR last week. The gap between offers and bids has remained high and demand has been limited. The tradable level in the Philippines has been at $670-675/mt CFR, while in Thailand it has been at $680-685/mt CFR, according to sources. Nevertheless, as there have not been many options, when buyers need to restock they will have to accept higher prices, sources believe.
Offers for ex-China wire rod have been heard at $730-750/mt FOB, moving up by $20/mt compared to the previous week. Only rare export offer prices for Chinese wire rods have been heard due to the pending export tax rebate policy. “Ex-China wire rod offer prices have been uncompetitive in the export market, China’s exports will be difficult in the near future,” an international trader said.
The production curbs in Tangshan will provide solid support for wire rod prices in the local market. The sharply rising freight rates have caused buyers and sellers to be cautious as regards the future prospects for the market.
As of Thursday, April 1, rebar futures at the Shanghai Futures Exchange are standing at RMB 5,003/mt ($763/mt), increasing by RMB 208/mt ($31.7/mt) or 4.3 percent since March 25, while rising by 0.95 percent compared to the previous trading day (March 31).
$1 = RMB 6.5584