Chinese longs maintain steady downtrend due to seasonal demand halt

As of June 24, average Chinese domestic rebar and wire rod prices have indicated further decreases by almost the same margins as a week ago amid decreasing rebar futures prices and slack demand from downstream users due to heavy rains in some regions of China.  

The average rebar price has decreased by RMB 70/mt ($9.8/mt) compared to June 17, while the average 6.5 mm HPB 300 wire rod price has seen a drop of RMB 60/mt ($8.4/mt). Rebar prices have edged down by RMB 30/mt compared to the previous trading day, June 21.

During the past week, rebar and wire rod prices in the Chinese domestic market have moved down further amid the slack demand from downstream users. However, the inventory of rebar and wire rod has decreased, signaling that pressure from supply has eased to a certain degree. Heavy rains and floods in some regions of China have exerted a negative impact on the rebar and wire rod market. Cautious sentiments have prevailed among market players as some producers’ prices are already close to breakeven, and more production cuts may be seen in the near future.

But for now, it is expected that rebar and wire rod prices in the Chinese domestic market will likely continue their downtrend in the coming week.

As of June 24, rebar futures at Shanghai Futures Exchange are standing at RMB 3,532/mt ($496/mt), decreasing by RMB 81/mt ($11.4/mt) or 2.24 percent since June 17, while down 1.51 percent compared to the previous trading day, June 21.  

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.    

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

 Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 7.1201