Prices for ex-Asia wire rod have dropped this week as the uptrend in China was short-lived and as demand remains below expectations, with the market in the oversupply zone.
Offers for ex-China wire rod from second-tier mills have been heard at $510-530/mt FOB, edging down by $5/mt on average due to the declines seen on the lower end.
“In the Chinese domestic market, rainy weather in some regions have exerted a negative impact on demand, resulting in the prevailing cautious sentiments among market players,” an international trader said. Meanwhile, ferrous metal futures prices have indicated an overall downtrend in the given week, following the rebound in the previous week, indicating that demand has not improved as much as market players had expected.
Import wire rod prices in Southeast Asia have also followed a downward trend with the lowest offers for Q235 material from traders heard at $510-515/mt CFR Manila, while last week the tradable level was at $510-525/mt CFR, and most firm offers have remained above $520/mt CFR. Market sources said that such low prices are from traders going short or doing non-VAT trading. Buyers in Southeast Asia have been purchasing small quantities based on their needs.
Wire rod offer prices from Indonesia’s Dexin have been heard at $525/mt FOB, moving down by $15/mt over the past week, and buyers from distant markets are still waiting for further discounts. Ex-Malaysia wire rod is $5/mt more expensive, while offer prices from Vietnam’s Hoa Phat have been heard at $535/mt FOB, versus $545-550/mt FOB previously.
As of March 28, rebar futures at Shanghai Futures Exchange are standing at RMB 3,481/mt ($490/mt), decreasing by RMB 135/mt ($19/mt) or 3.7 percent since March 21, while down 0.6 percent compared to the previous trading day, March 27.
$1 = RMB 7.0948