Chinese Steel Wire Rod Prices Show Improvement, Bearishness Continue in US and Europe Market

Shanghai (China): On April 19th, the Producer Price Index for Metals and Metal Products Steel Wire dropped, while Steel Wire Drawing for Carbon Steel Wire saw a decrease. Excessive inventories in the USA market, triggered by reduced demand in construction, led to a decline in steel prices. German Steel Wire Rod prices fell, and freight costs from China to Northern Europe dropped. Low demand raised doubts about new pricing acceptance in the struggling construction sector. In China, Steel Wire Rod prices increased due to a surge in Petroleum coke prices, with the scrap market growing from recovering steel prices and limited supply. The industry anticipates strong demand as mills gear up production, boosting Steel Wire Rod prices.

At the end of the week on April 19th, there was a notable reduction of 0.2% in the Producer Price Index for Commodities, specifically Metals and Metal Products Steel Wire, which decreased by 1.5% in March 2024 compared to the last month. Alongside this, the Producer Price Index for Industry, specifically focusing on Steel Wire Drawing for Carbon Steel Wire, saw a decrease of 0.35% in March compared to the month before, as per data provided by FRED. This downward trend was mainly influenced by excessive inventories in the USA market, particularly due to decreased demand from the construction industry. Consequently, Steel Wire Rod prices outside Texas observed a decline on April 19th.

Steel Wire Rod prices in the German market saw a marginal decrease of 0.3%. The freight costs from China/East Asia to Northern Europe fell by 6.8% on April 19th compared to the prior week. Demand for Steel Wire Rod products stayed slow, casting doubt on whether the new pricing would be accepted, especially in the struggling construction sector, the main consumer of these goods. German wire rod prices stayed steady this week due to weak demand, playing a part in settling Steel Wire Rod prices, showing a weekly decline. This drop raises concerns about market acceptance and reflects ongoing challenges in the construction industry, impacting the demand for Steel Wire Rod products.

During the week ending, Chinese domestic Steel Wire Rod prices underwent an increase by 0.36% due to a significant 6.9% surge in Petroleum coke prices. Additionally, the scrap market in China observed growth last week, fuelled by a recovery in steel prices and constrained scrap supply. The factors contributing to the uptick in Steel Wire Rod prices include heightened demand from downstream users and diminished stocks from Steel Wire Rod producers and traders. It is anticipated that demand will continue to be robust as mills show an increasing willingness to resume production, driven by improved margins and heightened downstream demand. Consequently, Steel Wire Rod prices escalated.

According to ChemAnalyst, in the United States, Steel Wire Rod prices are set to undergo a bullish trend as it is anticipated to change owing to heightened demand in correlated industries like automotive due to the change in season where demand is relatively high. In Germany, prices for Steel Wire Rod could climb due to escalating raw material expenses. Conversely, China might experience a spike in demand from the construction sector, resulting in heightened purchases and an upward growth trajectory for Steel Wire Rod prices.