By the week ending July 26th, wire rod prices saw a decline of 2.7% amid difficult market conditions. Despite the weak demand, China continues to experience a high supply of wire rods. Producers are increasingly hesitant to boost production due to rising inventories and sluggish demand. Adding to the supply-side challenges, new mandatory quality standards for steel are set to be implemented soon. Regional steel trading associations have requested a postponement of these standards, expressing concerns over existing stockpiles and advocating for a smoother transition.
The demand for wire rods in China remains notably weak, largely due to the downturn in the property sector. This is reflected in the Purchasing Managers' Index for the steel industry, which indicates a decline in production activities and demand. Moreover, high temperatures and frequent rainfall have further hindered construction activities, exacerbating the weak demand. The real estate crisis has significantly reduced domestic steel demand, prompting a surge in exports to markets in East Asia, India, the Middle East, and Latin America.
Looking ahead, China is expected to see an increase in demand from the construction sector, potentially leading to higher purchases and prices for wire rods.
According to the latest data, Chinese wire rod prices were flat between USD 480-481 during the week of August 1-6.
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