Local Chinese longs prices only rise slightly after holiday, futures down

As of February 19, average Chinese domestic rebar and wire rod prices have indicated a slight uptrend compared to the levels seen before the Chinese New Year holiday amid positive expectations for the post-holiday market. However, the increases have been tiny as in general demand has failed to improve significantly so far and futures prices have decreased, which is not very common for a post-holiday period.

The average rebar price has risen by RMB 13/mt ($1.8/mt) compared to February 5 and February 9, while the average 6.5 mm HPB 300 wire rod price has also seen a rise of RMB 13/mt ($1.8/mt). Though longs prices have edged up compared to ten days ago, officially just a part of the market resumed work on Sunday, February 18, and prices increased faster only on the back of sentiments, while today prices have retreated compared to the previous day, leaving just a small increase compared to the pre-holiday period. “Local prices are lower again by RMB 10-20/mt in most regions [compared to Sunday], then the trade volume has started to improve and physical inventories increased by 20-30 percent during the long holiday,” a trader said.

During the past week, transaction activities were suspended due to the long holiday, while supply also decreased, and inventory of rebar and wire rod increased. Following the long holiday, construction sites and transportation activities have not resumed their normal levels, exerting a negative impact on rebar and wire rod prices. However, market players are optimistic on the future prospects for rebar and wire rod prices as they know buyers will be gradually returning to the market in the near future. It is expected that rebar and wire rod prices in the Chinese domestic market will fluctuate within a limited range first and then edge up later.

On February 19, rebar futures contract (rb2405) offers closed at RMB 3,808/mt ($540/mt) at Shanghai Futures Exchange, decreasing by RMB 25/mt ($3.5/mt) or 0.65 percent compared to February 5, while decreasing by 1.07 percent compared to the previous trading day.

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 7.1032