Slow activity and rising inventory in local Chinese rebar and wire rod market

During the week ending February 24, rebar and wire rod prices in the Chinese domestic market have maintained their downward trend, while overall transaction activity has been slack. On February 24, rebar futures contract (1405) offers closed at RMB 3,384/mt ($556/mt) at Shanghai Futures Exchange, decreasing by $12/mt as compared to the previous week. Average domestic rebar and wire rod prices in China's main markets can be viewed in the SteelOrbis price reports section.
 
In the given week, inventories of rebar and wire rod in the Chinese domestic market have continued to rise as sales volumes have not indicated any improvement. Accordingly, the downward pressure on market prices has increased. Meanwhile, the softness in the steel futures market and the downtrends in the coke and iron ore markets have negatively affected the finished steel markets in China. It is thought that the prices of rebar and wire rod in the Chinese domestic market are likely to trend down in the coming week due to weak demand as well as shortages of liquidity in the construction sector.