Average offer prices for ex-China wire rod have moved down after the long holiday, impacting sentiments in SE Asia’s import market. Though ASEAN-based mills have been trying to keep wire rod prices stable after the recent decline in China, it will be hard to so for long, SteelOrbis learned from the market.
Offers for ex-China wire rod from second-tier mills have been heard at $510-520/mt FOB, moving down by $10/mt on average compared to September 28, as the higher offers at $530-540/mt FOB seen before the holiday vanished. Moreover, some sellers, who deal with non-VAT trading, may provide prices even slightly below $500/mt FOB. Rebar futures have moved on an overall downtrend, exerting a negative impact on wire rod prices, while steelmakers’ profitability has been low, and downstream users have been unwilling to build up stocks even following the long holiday. “It has resulted in the prevailing wait-and-see stance as regards the future prospects for the local wire rod market, while big wire rod producers show a strong willingness to export,” a trader said.
Offer prices of ex-China wire rod have been at relatively low levels in the global market, and so buyers in Southeast Asia have been active in making inquiries. Several deals are heard to have been done at $510-515/mt CFR for shipment in November and December, while before the holiday the reference price for import wire rod in Southeast Asia was at $520-535/mt CFR. “Chinese non-VAT sellers were at $520-525/mt CFR Manila before the holiday Now, to sell even at $515/mt CFR is a miracle,” a trader said.
Official offer prices for ex-Indonesia and ex-Malaysia wire rod have remained at $520-530/mt FOB, and one Vietnamese mill has been quoting at $535/mt FOB.
As of Thursday, October 12, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,627/mt ($505/mt), decreasing by RMB 63/mt ($8.8/mt) or down 1.7 percent since September 28, while increasing by 0.3 percent compared to the previous trading day (October 11).
$1 = RMB 7.1776