Export prices for Chinese wire rod surged this week as the government has officially announced that export tax rebates for most steel products, including wire rod, will be completely revoked from May 1.

This week offers for Chinese low-carbon wire rod (6.5 mm, SAE1008) were in the range of $880-890/t FOB for July shipment, up by $130/t over a week.

Unlike Chinese HRC producers, which have already factored in the tax rebate removal, most wire rod producers previously announced their prices without VAT because they had agreed with the customers that they would bear the related risks. Some steelmakers have not set their new offers yet and plan to return to the market after May 5.

In the meantime, bullish sentiment coming from China supported price increase for wire rod in SE Asia. A Malaysian steelmaker increased offers by $45/t over a week to $770-775/t CFR Thailand and sold 5,000 t at $765/t CFR for June shipment.