Average offer prices for ex-China wire rod have seen slight rises over the past week and ASEAN region-based mills have also been insisting on high prices, seeing stronger raw material prices. In Southeast Asia’s import market, the most attractive offers have been coming from Chinese traders, using non-VAT trading.
Offers for ex-China wire rod from second-tier mills have been heard at $535-550/mt FOB, edging up by $5/mt on average compared to November 16. The large mills have been asking for $550/mt FOB at the lowest and up to $570-575/mt FOB.
Inventory of wire rod in the local Chinese market has continued to decline, bolstering prices, while raw material prices, including coke and iron ore, have increased, also exerting a positive impact on wire rod prices. “Recently, the relevant government departments in China have stated that financial institutions should implement measures to provide support for real estate enterprises. One of the first-tier cities, Shenzhen, has issued a policy adjustment for second-house buying, cutting the required percentage of downpayment from 70-80 percent to 40 percent, aiming to stimulate the real estate industry, which will positively affect market sentiments,” an international trader said.
Offer prices of ex-Indonesia and ex-Malaysia wire rod have been heard at $550/mt FOB and $540/mt FOB, respectively. While Malaysian prices have been relatively stable as mills still have allocation for December shipment, the leading Indonesian mill has decreased offers by $5-10/mt.
In the import wire rod market in Southeast Asia, the lowest tradable level has been assessed only for Chinese traders’ non-VAT prices at $538-545/mt CFR, where the lower end corresponds to the recent negotiations and a rumored deal to the Philippines. At the same time, large Chinese mills have been asking for $575-585/mt CFR Manila, while ASEAN offers have been at $550-570/mt CFR depending on the mill.
As of Thursday, November 23, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,934/mt ($554/mt), decreasing by RMB 38/mt ($5.3/mt) or down 0.96 percent since November 16, while decreasing by 1.3 percent compared to the previous trading day (November 22).
$1 = RMB 7.1212