Local Chinese longs prices down by up to $19/mt, rebound awaited

As of July 29, average Chinese domestic rebar and wire rod prices have moved down amid decreasing rebar futures prices, the seasonal weak demand, and the shift to the new rebar standard from September 25. However, some gradual rebound is expected amid the reduction in production volumes.

The average rebar price has decreased by RMB 133/mt ($19.0/mt) compared to July 22, while the average 6.5 mm HPB 300 wire rod price has seen a decrease of RMB 117/mt ($16.4/mt). Rebar prices have edged down by RMB 10/mt compared to the previous trading day, July 26.

During the given week, rebar and wire rod prices in the Chinese domestic market have moved down sharply amid sluggish demand and declining rebar futures prices. Due to the planned shift to the new rebar standard, the market has come under heavy pressure to sell off current rebar stocks, exerting a negative impact on rebar and wire rod prices. However, steelmakers have stepped up their maintenance works, resulting in decreasing outputs of rebar and wire rod. The declining inventories may bolster prices in the near future. It is thought that rebar and wire rod prices in the Chinese domestic market will likely indicate a rebounding trend in the coming week.

As of July 29, rebar futures at Shanghai Futures Exchange are standing at RMB 3,363/mt ($472/mt), decreasing by RMB 88/mt ($14/mt) or 2.5 percent since July 22, while down 0.39 percent compared to the previous trading day, July 26.

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 7.1316