China makes positive return from holiday, longs prices up, expectations good but cautious

As of May 6, average Chinese domestic rebar and wire rod prices have moved on an upward trend amid increases in futures prices after the holidays as overall sentiment is good. Nevertheless, market sources do not expect surging price rises in the near future as a few restricting factors still exist and so the market will move up very cautiously. 

The average rebar price in China has increased by RMB 27/mt ($3.8/mt) compared to April 29, while the average 6.5 mm HPB 300 wire rod price has seen a rise of RMB 23/mt ($3.2/mt). Rebar prices have edged up by RMB 27/mt compared to the previous trading day, April 30. 

Rebar and wire rod prices have indicated some rises amid increasing rebar futures prices following the Labor Day holiday. Recently, steelmakers’ capacity utilization rates have increased amid improved profitability. At the same time, market sentiments are positive. However, there were some supplies arriving in the market during the holiday in most cities and so inventories have increased, which will exert a negative impact on rebar and wire rod prices in the near future. Moreover, rainy weather in southern China has reduced the demand in the region for rebar and wire rod. It is thought that rebar and wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week, with some positive bias.

As of May 6, rebar futures at Shanghai Futures Exchange are standing at RMB 3,735/mt ($517/mt), increasing by RMB 60/mt ($0.7/mt) or 1.6 percent since April 29, while up 1.77 percent compared to the previous trading day, April 30.  

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 7.0994