Local Chinese longs prices lose up to $20/mt over the week amid weak demand

As of March 11, average Chinese domestic rebar and wire rod prices have moved down sharply amid continuously rising inventory levels and the slow improvement in demand from downstream users.

The average rebar price has declined by RMB 140/mt ($20/mt) compared to March 4, while the average 6.5 mm HPB 300 wire rod price has also seen a drop, of RMB 130/mt ($18.3/mt). Rebar prices have moved down by RMB 60/mt compared to Friday, March 8.  

During the given week, more steelmakers have resumed production activities, resulting in increasing production of rebar and wire rod, which has exerted a negative impact on prices. At the same time, demand from downstream users has been slow, contributing to increasing inventory levels, which weakened the support for rebar and wire rod prices. Moreover, market players are cautious as regards the future prospects for the rebar and wire rod market, and so they have chosen to sell at lower prices.

So far, China’s real estate industry has continued its weak performance, while the infrastructure segment is weaker than expected. 12 Chinese provinces and cities at high risk from debts were requested by the central government to slow down or halt construction of infrastructure projects.

Furthermore, iron ore futures prices indicated a sharp decline of 5.41 percent on March 11, which will reduce the support for rebar and wire rod prices from the cost side. However, demand may improve to a certain degree as the weather gets warmer. It is expected that rebar and wire rod prices in the Chinese domestic market will edge down slightly or fluctuate within a limited range in the coming week.

As of March 11, rebar futures at Shanghai Futures Exchange are standing at RMB 3,606/mt ($508/mt), decreasing by RMB 156/mt ($22/mt) or 4.1 percent since March 4, while down 2.41 percent compared to the previous trading day, March 8.  

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 7.0969