Local Chinese longs prices down sharply, cautious expectations for rebound

During the past week ending August 19, average Chinese domestic rebar and wire rod prices have moved down by significant margins, by around $15-20/mt, due to continuously decreasing rebar futures prices and the continuing sell-off of old standard rebar. However, cautious expectations for some slight price rebound have been seen after widespread production cuts and the drop in supply in general.

The average rebar price has decreased by RMB107/mt ($15/mt) compared to August 12, while the average 6.5 mm HPB 300 wire rod price has seen a decrease of RMB 140/mt ($19.6/mt). Rebar prices have remained stable compared to the previous trading day, August 16. 

During the given week, rebar and wire rod prices in the Chinese domestic market have moved down sharply amid the prevailing cautious sentiments among market players, though steelmakers’ production outputs and inventories levels have declined. Following continuous big declines in rebar and wire rod prices, steelmakers cut their outputs to the lowest level in the past few years, reducing the pessimism in the market to a certain degree. There have been supply shortages of rebar and wire rod in some cities, bolstering market players’ sentiments as regards the price trend. It is thought that rebar and wire rod prices in the Chinese domestic market may bottom up in the coming week.  

As of August 19, rebar futures at Shanghai Futures Exchange are standing at RMB 3,156/mt ($442/mt), decreasing by RMB 66/mt ($9.2/mt) or 2.05 percent since August 12, while up 1.41 percent compared to the previous trading day, August 16.  

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 7.1415