The price spread of rebar and wire rods widened to over 400 yuan/mt in Hangzhou as of Monday June 1. This compared with a typical price gap of 150-200 yuan/mt in last week.
Steel mills using the majority of their molten iron to produce more profitable rebar instead of wire rods accounted for the widening price gap. In addition, output of wire rods was affected as some major wire rods producers such as Henan Yaxin Steel and Jiangsu Huahong Iron & Steel in east China undertook cuts or maintenance on environmental grounds in recent weeks.
The price spread is expected to narrow as supplies of wire rods grow from mid-June. Suspended steel mills will have resumed production then.
In the Hangzhou market, rebar was offered at 4,030-4,040 yuan/mt on the morning of June 4, while wire rods were offered at 4,460 yuan/mt.