Average offer prices for ex-China wire rod have indicated a significant declining trend over the past week as demand in the local market has been extremely weak and this situation is likely to continue in the near future. At the same time, ex-ASEAN wire rod prices have softened only slightly.
Offers for ex-China wire rod from the second-tier mills have been heard at $495/mt FOB, moving down sharply on average compared to last week’s levels of $505-515/mt FOB, while reference deal prices have settled even lower - at $490/mt FOB.
During the given week, wire rod prices in the Chinese domestic market have seen significant decreases amid declining rebar futures prices. Demand in the global market has been sluggish, exerting a negative impact on the wire rod market. Typhoon Gaemi is going to hit coastal areas in China in the evening of July 25, exerting a negative impact on construction activities in the provinces in question and weakening the support for wire rod prices. It is expected that wire rod prices in the Chinese domestic market will edge down further in the coming week, according to market sources.
Ex-Indonesia wire rod offer prices are at $495-500/mt FOB, edging down by $5/mt compared to last week. “The mill doesn’t want to go below $495/mt FOB for wire rod, but it is the same as in the case of billets: they will have to, if they want to sign deals,” a trader said. Ex-Malaysia wire rod offers have been heard at $500/mt FOB, while ex-Vietnam material from Hoa Phat has been a bit higher - at $505/mt FOB, decreasing by $5/mt on average.
In Southeast Asia’s import wire rod market, offers have declined to $510-515/mt CFR, versus the lowest level reported in a deal a week ago at $520/mt CFR. Market sources said that buyers will now try to push prices down to $500-505/mt CFR, though it is unclear if sellers will agree to this easily.
As of July 25, rebar futures at Shanghai Futures Exchange are standing at RMB 3,329/mt ($467/mt), decreasing by RMB 163/mt ($23/mt) or 4.7 percent since July 18, while down 2.03 percent compared to the previous trading day, July 24.