Average offer prices for ex-China wire rod have edged down slightly over the past week, but most market sources believe that quotations have hit the bottom as the market mood has been supported by the announcement of more production cuts, not only in the northern China, but also in the eastern province of Jiangsu.
Offers for ex-China wire rod have been heard at $520-530/mt FOB, edging down by $5/mt compared to August 10.
“During the given week, outputs of wire rod have declined, easing the pressure from the supply side. At the same time, another round of crude steel production restrictions has been heard, which will bolster market sentiments. Some traders have built up stocks of wire rod, which may exert a positive impact on prices,” an international trader said.
ASEAN-based mills have managed to sell some volumes to traders at $520-525/mt FOB, with the material destined for Southeast Asia. Prices are in line with last week’s offers from mills.
The lowest offers for ex-ASEAN wire rod from traders are still at near $530/mt CFR Manila or slightly lower, lower than China’s offer prices considering logistics costs. However, taking into account changing moods, traders may also try to increase prices even though demand is still far from good.
As of Thursday, August 17, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,726/mt ($517.5/mt), rising by RMB 55/mt ($7.6/mt) or 1.5 percent since August 10, while increasing by 0.68 percent compared to the previous trading day (August 16).
$1 = RMB 7.2076