Average offer prices for ex-China wire rod have moved on a downtrend over the past week, triggering declines in the import market in Southeast Asia. The downtrend in Asia and poor demand have pushed ASEAN-based mills to cut prices too, while buyers are still cautious, wondering if prices still have room to go down.
Offers for wire rod from smaller Chinese mills and traders have been heard at $510-530/mt FOB, down by $30/mt compared to May 18. “During the given week, the economic data in China have signaled considerable downward pressure on the economy. The slack performance of the real estate industry has exerted a negative impact on the demand for wire rod,” an international trader said.
The reference import prices for wire rod in Southeast Asia have been heard at $520-530/mt CFR Manila, which is down from last week’s $540/mt CFR. The lowest offers from been coming from China at $530/mt CFR Manila, but buyers have been waiting for better offer prices amid the continuous decreasing trend seen in wire rod prices in the Chinese domestic market.
As of Thursday, May 25, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,432/mt ($487/mt), decreasing by RMB 255/mt ($36.2/mt) or down 6.92 percent since May 18, while declining by 2.53 percent compared to the previous trading day (May 24).
At the same time, ASEAN mills have also dropped prices. In particular, offers from the main Malaysian mill have lost $10-20/mt over the past week, coming to $540/mt FOB. Ex-Indonesia offers have been at $530/mt FOB and may possibly fall another $5-10/mt, versus $530-540/mt FOB last week.
$1 = RMB 7.0529
