The Asian wire rod market has been extremely slow over the past week as average offer prices for ex-China wire rod have moved down rapidly and major importers in Southeast Asia have been voicing lower and lower bids, expecting wire rod to follow in line with falling billet prices.
Offers for ex-China wire rod have been heard at $570-600/mt FOB, decreasing by $20/mt compared to April 6. “During the given week, import iron ore prices have moved down, dragging down wire rod prices. Local demand for wire rod has been slack, while real estate and other industries have not improved as much as market players had expected. At the same time, domestic prices in the MENA region have decreased and so they might gradually join the export market to compete for orders,” a Chinese trader said.
In this situation, the tradable level for imported wire rod in Southeast Asia has dropped from $605-610/mt CFR early in the month to $580-590/mt CFR. Ex-China wire rod offers have been heard at as low as $580/mt CFR Manila and up to $590-600/mt CFR to Thailand with limited trading activity reported even at such low levels. Buyers in the Philippines have been unwilling to conclude purchases, seeing a slowdown in consumption in general and falling prices for all major products.
ASEAN mills have been unwilling to cut prices too sharply as even this would hardly attract much demand. Malaysian and Indonesian mills have been focusing on negotiations in distant markets like Europe, at $600-610/mt FOB, as there is demand at such levels, and prices are much more attractive for sellers. The general range of ex-ASEAN wire rod prices are at $650-665/mt CFR Europe. Moreover, new prices from the ASEAN region are expected at $660-670/mt CFR to Turkey, down from $680/mt CFR and above heard in the past week.
As of Thursday, April 13, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,886/mt ($565.6/mt), decreasing by RMB 52/mt ($7.6/mt) or down 1.3 percent since April 6, while declining by 0.72 percent compared to the previous trading day (April 12).
$1 = RMB 6.8658
