Local Chinese longs prices soften amid pressure from rising inventories

As of January 8, average Chinese domestic rebar and wire rod prices have decreased compared to last week and late December amid decreasing rebar futures prices and increasing inventory levels, reflecting slow demand.

The average rebar price has declined by RMB 7/mt ($1/mt) compared to December 25 and RMB 20/mt ($2.8/mt) compared to January 2, while the average 6.5 mm HPB 300 wire rod price has also seen a decrease of RMB 7/mt ($1/mt) over the past two weeks. Rebar prices have dropped by RMB 17/mt compared to Friday, January 5.

During the given week, rebar and wire rod prices in the Chinese domestic market have seen slight declines amid increasing inventory levels and certain decreases in coke prices. Meanwhile, demand for rebar and wire rod has continued to be slack, exerting a negative impact on prices. Import iron ore prices have decreased since last Friday, also weakening the support for rebar and wire rod prices from the cost side. It is expected that rebar and wire rod prices in the Chinese domestic market will edge down slightly in the coming week. 

On January 8, rebar futures contract (rb2405) offers closed at RMB 3,950/mt ($556/mt) at Shanghai Futures Exchange, decreasing by RMB 48/mt ($6.8/mt) or 1.2 percent compared to December 25, while decreasing by 1.52 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 7.1006