Local Chinese longs prices up slightly week on week, negative mood returns

As of July 8, average Chinese domestic rebar and wire rod prices have seen a rebounding trend amid slight decreases in production. However, since late last week the mood in the market has become negative again due to continuing concerns in relation to demand, weakening futures prices and lower cost support.

The average rebar price has increased by RMB 17/mt ($1.4/mt) compared to July 1, while the average 6.5 mm HPB 300 wire rod price has seen an increase of RMB 27/mt ($3.8/mt). Rebar prices have edged down by RMB 20/mt compared to the previous trading day, July 5.

During the given week, rebar and wire rod prices in the Chinese domestic market have rebounded at relatively low levels. Steelmakers cut their production due to their poor profit margins, thereby bolstering rebar and wire rod prices. At the same time, with the end of the rainy season, demand from downstream users has improved in southern and eastern China, resulting in decreases in inventories. However, hot weather conditions have hit eastern China, and in particular Shanghai, negatively affecting construction activities and weakening market sentiments. It is thought that rebar and wire rod prices in the Chinese domestic market will fluctuate within a limited range with a negative bias in the coming week.

As of July 8, rebar futures at Shanghai Futures Exchange are standing at RMB 3,503/mt ($491/mt), decreasing by RMB 59/mt ($8.3/mt) or 1.7 percent since July 1, while down 2.31 percent compared to the previous trading day, July 5.

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 7.1286