The mood in the Chinese wire rod market has improved, reacting to the rises in futures prices early this week, though export prices for wire rod from both Chinese and ASEAN suppliers have not changed much, with customers not ready for increases.
Offers for ex-China wire rod have been heard at $460-470/mt FOB, remaining stable over the past week, while the reference deal prices have been corrected up slightly to $460/mt FOB, up from $455-460/mt FOB last week, amid better sentiments in the local Chinese market.
Since the beginning of this week, rebar and wire rod sales in the local Chinese market have posted some increases, while iron ore prices have seen big rises, bolstering wire rod prices from the cost side. Though steelmakers have implemented production cuts, the gap between supply and demand has not eased significantly, exerting a negative impact on the wire rod market. “We will still need to see to what extent the Federal Reserve cuts interest rates and how production control measures play out,” a Chinese mill said.
Rebar futures prices have increased since August 19, positively affecting wire rod prices in the spot market, so it is thought that wire rod prices in the Chinese domestic market may indicate further slight increases in the coming week, according to market sources, though prices in the export market will remain under pressure from weak demand.
Offer prices of ex-Indonesia wire rod have been heard at $470/mt FOB, remaining unchanged compared to last week, while offer prices of ex-Malaysia wire rod have been heard at $465-470/mt FOB. Vietnam’s Hoa Phat has been offering at $485/mt FOB.
In Southeast Asia’s import market, the price assessments for Q195 wire rod are still at $475-485/mt CFR.
As of August 22, rebar futures at Shanghai Futures Exchange are standing at RMB 3,174/mt ($437/mt), increasing by RMB 55/mt ($18.9/mt) or 1.8 percent since August 15, while down 0.69 percent compared to the previous trading day, August 21.
$1 = RMB 7.1228