Average offer prices for ex-China wire rod have moved down over the past week amid the decreasing trend in rebar futures prices and the generally negative outlook for the local market in the near future. At the same time, mills based in the ASEAN region have also cut offers, and Asian traders have resumed short position offers in the region as they believe that the downtrend will persist for some time.
Offers for ex-China wire rod from the second-tier mills have been heard at $480-495/mt FOB, moving down by $10/mt on average compared to November 7. This has made offers from smaller Chinese mills the most competitive in Asia at the moment.
During the given week, wire rod prices in the Chinese domestic market have moved down amid declining rebar futures prices. Downstream users have only concluded purchases as needed, weakening the support for wire rod prices to a certain degree. Bearish sentiments have started to prevail among market players and it is expected that wire rod prices in the Chinese domestic market will edge down further in the coming week.
Offer prices of ex-Indonesia wire rod have been heard at $495/mt FOB early this week, down by $5/mt from last week. Moreover, some market sources believe that additional discounts of $5/mt or more can be provided by the mill. Offers of ex-Malaysia wire rod have been heard at high levels - $505-510/mt FOB. A few traders in Asia said that they are waiting for prices for wire rod to slip to $475-480/mt FOB in the short term, providing more space for traders to accelerate sales.
In the import market in Southeast Asia, the tradable level has dropped to $495-510/mt CFR this week, while last week offers were at $520/mt CFR and one small deal was heard to the Philippines at $510-515/mt CFR. “Traders have already started to offer at below $500/mt CFR. The market is bearish,” an Asian trading source said.
As of November 14, rebar futures at Shanghai Futures Exchange are standing at RMB 3,313/mt ($460/mt), decreasing by RMB 123/mt ($17/mt) or 3.6 percent since November 7, while down 0.93 percent compared to the previous trading day, November 13.
$1 = RMB 7.1966