Wire rod suppliers have continued to push up offer prices to Southeast Asia over the past week, seeing bullishness in the billet segment and believing that after the long holiday demand will rise and prices will go up further.
New offers for ex-ASEAN wire rod to the Philippines have been reported at $750-760/mt CFR, up by $10-20/mt over the past week. Small deals were done at $740-745/mt CFR last week, versus the only deal done earlier which was reported at $740/mt CFR. Sources said that customers are resisting the latest hike, but they have limited options amid aggressive increases by suppliers and higher costs. Some exporters believe that after the Chinese New Year holiday wire rod offers could reach $770-780/mt CFR. Indian wire rod suppliers have withdrawn from the export market due to the strong demand in the domestic market.
Offers for ex-China wire rod have been heard at $740-770/mt FOB, remaining stable on average compared to the previous week. “A wait-and-see stance has prevailed among market players as the Chinese New Year holiday is approaching, while the transaction volume has shrunk significantly, and market players think that ex-China wire rod offer prices will likely move up rapidly after the long holiday,” an international trader said.
The environmental protection measures will be stricter during the Winter Olympics which start on February 4, which will reduce pig iron output and provide support for wire rod prices.
As of Thursday, January 27, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,673/mt ($737/mt), decreasing by RMB 40/mt ($6.3/mt) or 0.85 percent since January 20.