Bullish mood prevails in Asian wire rod market after New Year holiday

Thursday, 04 January 2024 14:57:49 (GMT+3)   |   Shanghai
       

Average offer prices for ex-China wire rod have moved sideways over the past week, though ASEAN suppliers have been optimistic and have increased offers a little, expecting an improvement of demand soon. The hike in raw material prices has been one of the main reasons for the bullish mood in the wire rod market in Asia.  

Offers for ex-China wire rod have been heard at $550-590/mt FOB, remaining stable on average amid quiet activities due to the New Year holiday. The high levels of iron ore prices have bolstered wire rod prices in the Chinese domestic market, while demand from downstream users has slackened, which has exerted a negative impact. “Though production has also seen decline, though its declining pace has been slower than the decrease in demand, more steelmakers may implement production restrictions in the near future, which will reduce the gap between supply and demand, and so wire rod prices may fluctuate within a limited range in the coming week,” an international trader said.  

Offer prices of ex-Indonesia and ex-Malaysia wire rod have been heard at $555-565/mt, FOB, up by $5/mt compared to December 28.  

Traders in Asia have also been bullish, seeing higher FOB prices from mills. The lowest offers for Q235 wire rod from traders to the Philippines have been reported at $570/mt CFR, up by $5-10/mt from late December. Market sources said that, while buyers’ price ideas were at $550-555/mt CFR in the second half of December, now the realistic levels are at $565-570/mt CFR as no one can offer lower levels due to high raw material prices.  

As of Thursday, January 4, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,046/mt ($563/mt), decreasing by RMB 50/mt ($7/mt) or up 1.25 percent since December 28, while decreasing by 0.22 percent compared to the previous trading day (January 3).  

$1 = RMB 7.0997


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