Average offer prices for ex-China wire rod have moved down compared to the previous week due to the sluggish demand in the traditional offseason in eastern China. Moreover, regional producers have lowered their prices to the Philippines, where buying activity has been very slow recently.
Offers for ex-China wire rod have been heard at $840-850/mt FOB, moving down by $15/mt on average compared to the previous week amid bearish sentiments in traditional offseason. “The sluggish demand in the local market has exerted a negative impact on ex-China wire rod prices as steelmakers have tried to stimulate export activities, while the firm trend of raw material prices may bolster steel prices to some extent,” an international trader said.
The rising inventory of wire rod in China and the negative impact from the Covid-19 pandemic in Guangdong Province weaken the support for prices. It is thought that wire rod prices in the Chinese domestic market may edge down in the coming week.
Offer prices of ex-Vietnam IF wire rod have been heard at $730/mt CFR to the Philippines, while ex-Malaysia offers have been at $760/mt CFR. This is lower than offers from Southeast Asian producers at mainly $760-770/mt CFR over the past two weeks. An Indonesian mill has been officially offering at $790/mt CFR, but this level has been assessed as being too high for the current market conditions. The transaction activities in the Philippines have not been good, while buyers have been targeting $710-720/mt CFR.
As of Thursday, June 24, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,933/mt ($761/mt), decreasing by RMB 168/mt ($26/mt) or 3.3 percent since June 17, while increasing by 0.65 percent compared to the previous trading day (June 23).
$1 = RMB 6.4824