Average offer prices for ex-China wire rod have moved on a downtrend over the past week due to the slow local market, while ASEAN-based sellers have also followed the soft trend as they have had no sales for some time already and have had to cut offers to push volumes overseas.
Offers for ex-China wire rod from second-tier mills have been heard at $505-515/mt FOB, moving down by $15/mt on average compared to last week, while reference deal prices have been heard at $500-510/mt FOB especially for non-VAT wire rod.
During the given week, ex-China wire rod offer prices have indicated declines amid the heavy rainfalls and not temperatures, which have negatively affected demand from downstream users. “The demand from users in the Middle East and South America has slackened, dragging down export volumes and prices in the market. The rainfall in China will continue to exert a negative impact on construction activities and demand for wire rod,” an international trader said. However, prices may take a pause from their downtrend since iron ore has rebounded above $105/mt CFR over the past two days.
Indonesia-based Dexin’s wire rod offers have been heard at $505-510/mt FOB, going down by $10-15/mt compared to last week. Moreover, one deal for a sizable lot has been reported at $503/mt FOB this week. Prices of ex-Malaysia wire rod have been heard at $510-515/mt FOB officially, decreasing by $5-10/mt, and export offer prices from Vietnam’s Hoa Phat have been heard at $515/mt FOB, moving down by $10/mt on average.
The previous deals for import wire rod in the Philippines were at $522-525/mt CFR, mainly for ex-China non-VAT wire rod. “I would say now the reasonable price is $515-520/mt CFR, but there have not been any deals this week,” a local source said.
As of June 27, rebar futures at Shanghai Futures Exchange are standing at RMB 3,535/mt ($496/mt), decreasing by RMB 62/mt ($8.7/mt) or 1.7 percent since June 20, while down 0.23 percent compared to the previous trading day, June 26.
$1 = RMB 7.127