Stronger demand in local Chinese longs market, prices up slightly

During the week ending April 19, average Chinese domestic rebar and wire rod prices moved up first amid improved demand, and then remained range-bound.

During the given period, the average rebar price has gained RMB 33/mt, while the average wire rod price has added RMB 67/mt. Most gains happened early last week, while since Friday the rebar price level has increased by just RMB 3/mt.   

Rebar and wire rod prices edged down on April 12 due to the downward corrections in billet prices and the government’s statement regarding the continuous rises in commodity prices, while they moved up later as market players still held an optimistic view of the future prospects for the market in the peak season. Iron ore prices moved up again, also bolstering rebar and wire rod prices. The good weather in China has been positive for construction activities, which has exerted a positive impact on rebar and wire rod demand.

Nevertheless, the price gains in the domestic China’s longs market have been limited. The relatively high level of prices brought financial pressures to bear on downstream users. At the same time, the recent decline in futures prices have also signaled that rebar and wire rod prices in the spot market may fluctuate within a limited range in the near future.

On April 19, rebar futures contract (2105) offers closed at RMB 5,082/mt ($780/mt) at Shanghai Futures Exchange, up RMB 97/mt ($14.9/mt) or by 1.95 percent compared to April 12, but down by 0.95 percent compared to the previous trading day (April 16), signaling market players’ cautious sentiments.

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.  

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse. 

$1 = RMB 6.5233