Chinese wire rod prices increased this week, driven primarily by a surge in domestic futures, despite minimal improvement in export demand.

On Thursday, 6.5mm diameter mesh-grade wire rod was assessed at $470-480/tonne fob China, up $7.5/t week-on-week. The most-traded, May 2025 rebar contract meanwhile closed at CNY 3,208/t ($441/t), up by CNY 32/t from a week before.

The price uptick reflects heightened market confidence following voluntary production cuts by Chinese steel mills. Leading the reductions, two Xinjiang-based steel producers announced a 10% cut in output, signalling a shift towards supply discipline.

Market sentiment received an additional boost midweek as unconfirmed reports suggested that mills in Shandong and other eastern provinces – the major Chinese steel production bases – had received government directives to limit production.

The shipping schedules for major Chinese steel mills exporting wire rod have been pushed to May and June, reflecting tightening supply conditions.

Meanwhile, the latest export price for Chinese wire rod has climbed to $480-490/t fob, supported by strong domestic futures and improved market sentiment. However, with export demand still lagging, the sustainability of these price levels remains uncertain.

A market participant tells Kallanish that recent deals were concluded at $475-480/t fob, aligning with the general price trend. However, another trader indicates that short-selling sentiment is emerging, with some transactions potentially settling at as low as $470/t fob, depending on order specifics.

Offers for non-VAT wire rod in Hebei Province also climbed by $5-10/t this week, reaching $460-465/t fob. Traders remain confident that deals can be secured at this level and are reluctant to lower prices. However, overseas buyers continue to push for lower values, leading to an ongoing standoff with Chinese sellers.