September 07, 2008

Chinese rebar and wire rod export offer to reach USD 1000 FOB

It is reported that export offers for Chinese rebar and wire rod are expected to move up further in May and they are going to reach USD 1000 per tonne FOB soon. The steady rise in domestic market, robust overseas demand and rising production cost are believed to the major drivers.

Some steel producers have boosted export offer for rebar to USD 96 per tonne to USD 970 per tonne FOB June shipment. There is strong likelihood that quotation for July shipment would approach USD 1000 per tonne FOB or even higher. While wire rod is forecast to exceed USD 1000 per tonne FOB sooner or later.

Some steel mills have already shot up export offers last week citing higher cost and limited export allocation. Some traders indicate that current updated export quotations do not mean higher transaction prices. Actually, they lift prices on purpose so as to scare away some crazy buyers since there is almost no cargo for exports for the moment.

Most steel makers told Mysteel that the output is limited by expensive coke cost. They probably will be forced to cut production if there is not sufficient coke. The low production will lead to less exports and much higher export price.

New official export price would be announced following the 3 day long May Day Holiday. In addition, there will be more wire rod exports than rebar.

(Sourced from MySteel.net)