Some offer prices for wire rod have edged down in the Asian region over the past week, but most market sources assess these movement to be only fluctuations at higher levels after the sharp hike last week. Buying activity has been weak ahead of the holidays with only some customers agreeing to bid at above $600/mt CFR. At the same time, supply has also been reduced, mainly from China.
Major ex-ASEAN wire rod suppliers, from Indonesia and Malaysia specifically, have been asking for $585/mt FOB minimum for SAE1008 wire rod, which translates to $610-615/mt CFR SE Asia, while last week the announced new offers were all at around $620/mt CFR Manila. Ex-Vietnam wire rods have been available at $600-605/mt FOB to different destinations.
Since the overseas markets are approaching the Christmas holiday period, inquiries and purchases have gradually been suspended. Only a few bids have been reported at $590-615/mt CFR from South Korea and $600-610/mt CFR from the Philippines ahead of the holidays, while last week the tradable level has been assessed at $600/mt CFR. Bids from Vietnamese customers have been very low, still hardly above $570/mt CFR with market sources saying that this is due to the still weak demand, while offers are rather being pushed up by costs, including the latest rises in scrap prices.
Offers for ex-China wire rod have been heard at $590-610/mt FOB, down by $5/mt compared to December 15. However, some large Chinese mills have kept their offers for SAE1008 wire rod at $620/mt FOB, which is seen to be uncompetitive, according to sources.
“Rebar futures prices have moved down, negatively affecting wire rod prices, while demand for wire rod has been very slack due to the mass infections following the easing of Covid-19 measures, and this situation will continue in the coming period. At the same time, the supply of wire rod has also shrunk due to production halts caused by workers taking sick leave,” an international trader said.
As of Thursday, December 22, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,961/mt ($568.3/mt), decreasing by RMB 123/mt ($35.3/mt) or down 3.0 percent since December 15, while declining by 0.43 percent compared to the previous trading day (December 21).
$1 = RMB 6.9713
