Some ex-ASEAN wire rod offers retreat amid weakness in China, but further falls doubtful

Thursday, 22 February 2024 14:44:48 (GMT+3)   |   Shanghai
       

Average offer prices for ex-China wire rod have moved sideways over the past two weeks against the backdrop of the long holiday, while some ASEAN region-based mills have cut offers, seeing futures price declines and the prevailing negative sentiments in China.

Offers for ex-China wire rod from second-tier mills have been heard at $540-560/mt FOB, remaining stable on average due to the quiet market amid the Chinese New Year holiday (February 9-16).

Following the holiday, buying activities in wire rod market have gradually improved in the Chinese domestic market, while the cold weather still exerts a negative impact on the market. At the same time, some downstream users are not yet back in the market, weakening the support for wire rod prices “Market players think the market will likely improve after the Lantern Festival (February 24), so wire rod prices in the Chinese domestic market may rebound,” an international trader said.

Offer prices of major Indonesian mill Dexin Steel have been at $545-555/mt FOB, down from $560/mt FOB before the holiday. At the same time, prices of ex-Malaysia wire rod have been heard at the stable level of $550/mt FOB, as they were already low earlier this month. Vietnamese producers have been offering wire rod to distant markets from $560-570/mt FOB to $575/mt FOB voiced for European buyers. No deals have been heard yet.

The tradable level for Q235 wire rod in the Philippines is still assessed at $545-550/mt CFR, which is in line with last week and “can be found from Chinese traders”. At the same time, ex-ASEAN offers are at $555-560/mt CFR at the lowest in the Southeast Asian market.

As of Thursday, February 22, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,797/mt ($543/mt), decreasing by RMB 57/mt ($8/mt) or 1.5 percent since February 8, while increasing by 0.24 percent compared to the previous trading day (February 21).

$1 = RMB 7.1018


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