Average offer prices for ex-China wire rod have moved down over the past week amid the decreasing trend of rebar futures prices, while the outlook for next week is also negative.
Offers for ex-China wire rod from second-tier mills have been heard at $465-475/mt FOB, decreasing by $7.5/mt on average compared to January 2, while reference deal prices have been heard at $460-465/mt FOB, also declining by $7.5/mt. Moreover, some traders offering in short positions or dealing with non-VAT business have been discussing levels of $450-455/mt FOB.
During the given week, wire rod prices in the Chinese domestic market have edged down amid declining rebar futures prices. Demand for wire rod from downstream users has slackened continuously ahead of the Chinese New Year holiday (January 28-February 4), exerting a negative impact on market sentiments. Production of wire rod has declined slightly, while apparent consumption has also decreased, at a sharper pace, resulting in the weak performance of the market. It is thought that wire rod prices in the Chinese domestic market will likely move down in the coming week, sources said.
Official wire rod offer prices from Indonesia’s Dexin were at $470/mt FOB early this week, but by the end of the week a few market sources have already confirmed offers at $465/mt FOB or slightly below.
In the import wire rod market in Southeast Asia, the tradable levels have been assessed at $465/mt CFR Philippines and $475/mt CFR in Thailand, down from $470-485/mt CFR seen last week from traders dealing with both VAT and non-VAT trading.
As of January 10, rebar futures at Shanghai Futures Exchange are standing at RMB 3,202/mt ($445/mt), decreasing by RMB 70/mt ($9.7/mt) or 2.1 percent since January 3, while up 0.03 percent compared to the previous trading day, January 9.
$1 = RMB 7.1891
