Prices for imported wire rod have fallen in Southeast Asia this week due to critically weak demand and the need of some sellers to push volumes abroad. Moreover, negative developments in China during most of the week have led Chinese traders to offer low prices in the region. Average offer prices for ex-China wire rod from mills have also moved down sharply.
Ex-Indonesia and ex-Malaysia wire rods have been lowered to the Philippines to $670/mt CFR and $680/mt CFR respectively, which is far below the deals done at $710-720/mt CFR last week, while even lower levels have been reported from some Chinese traders, at $660-670/mt CFR Manila. Sources have said that the number of offers is limited, but since the outlook is bad buyers are looking for $650-660/mt CFR already. The tradable level for sales in the Philippines and Thailand is around $660-680/mt CFR, sources have said, down by $40-50/mt over the past week.
Offers for ex-China wire rod from mills have been heard at $690-720/mt FOB, moving down by $70/mt on average compared to June 16.
“Mainstream wire rod producers have incurred serious losses and issued production reduction plans, which will reduce supplies to the market, while hot weather has exerted a negative impact on construction activities at sites and will decrease the demand for wire rod,” an international trader said.
As of Thursday, June 23, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,235/mt ($631/mt), decreasing by RMB 271/mt ($40.4/mt) or 6.01 percent since June 16.