Average offer prices for ex-China wire rod have moved sideways over the past week, and, even though higher costs and some gradual increases in futures prices have been expected to support the market, this has not happened so far.
Offers for ex-China wire rod from small mills in Tangshan and traders have been heard at $510-520/mt FOB, moving sideways compared to October 12. Wire rod prices in the Chinese domestic market have seen declines amid the weak performance in the real estate sector and the decreasing trend in construction investments, though China has issued several stimulus policies to boost the housing industry. “It seemed that it did not have the effect market players expected, though the relatively high iron ore prices and coke prices have bolstered wire rod prices from the cost side,” a trader said.
Offer prices of ex-Indonesia wire rod are still at $520-525/mt FOB, but some ASEAN suppliers have already voiced higher targets, at $530-540/mt FOB, raising them by $10/mt compared to October 12. However, for now the market is not ready for any increase.
Counter-offers from buyers in Thailand have been heard at $520/mt CFR at the highest. While ex-China Q195 and Q235 wire rod from sellers, involved in non-VAT trading, have declined to $510/mt CFR Manila, down by around $4-5/mt from the previous levels, reflecting still bearish sentiments in the market. “There is no sense in buying billet when wire rod prices are at the same level,” a Manila-based source said.
As of Thursday, October 19, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,644/mt ($505/mt), increasing by RMB 17/mt ($2.4/mt) or up 0.5 percent since October 12, while rising by 0.28 percent compared to the previous trading day (October 18).
$1 = RMB 7.1795