Wire rod, also known as wire rod, typically refers to coiled, small-diameter round steel with diameters ranging from 5 to 19 mm (typically 6 to 9 mm). Low-carbon steel is predominant and widely used in construction and other fields.
Macroeconomic Environment
From a macroeconomic perspective, the continued implementation of domestic policies to stabilize growth will stimulate sectors such as infrastructure. Infrastructure is a major demand area for wire rod, and an increase in infrastructure projects will also drive demand for wire rod. For example, road and bridge construction projects require significant amounts of wire rod. Furthermore, a softening of the Federal Reserve’s stance could impact global capital flows and commodity prices. If capital flows into the commodity market, wire rod, a key product in the steel industry, could see some price support.
Market Supply and Demand
●Demand: The construction industry is the primary consumer of wire rod. If the real estate market gradually recovers and new projects begin, demand for wire rod will increase significantly. At the same time, the development of the manufacturing industry will also drive demand for wire rod. Industries like machinery and automobile manufacturing require wire rod in their production processes. Furthermore, with industrial development, requirements for wire rod quality and quality are becoming increasingly stringent and specialized. The market prospects for specialized wire rod are expected to expand, which will also, to a certain extent, influence the demand structure and overall volume of wire rod.
● Supply Side: If major steel mills steadily release production capacity and the market supply of wire rod is sufficient, prices may face some downward pressure in the absence of a significant increase in demand. Conversely, if environmental protection restrictions, equipment maintenance, or other factors reduce supply, prices may rise.
● Raw Material Cost: Iron ore is the primary raw material for wire rod production, and its price fluctuations significantly impact wire rod costs. If iron ore prices rise, steel mills’ production costs increase, and to maintain a certain profit margin, they may raise the ex-factory price of wire rod.
● Energy costs: Coal, electricity, and other energy sources are essential elements in the steel production process. Changes in energy prices directly affect steel mills’ production costs, which in turn impact wire rod prices.
Price Trend Forecast
Taking into account the above factors, wire rod price trends in the second half of 2025 are likely to unfold as follows:
● Early stage: If the macroeconomic environment continues to improve, infrastructure projects gradually commence, and the real estate market recovers, wire rod demand will gradually increase. At the same time, if raw material and energy prices remain relatively stable, wire rod prices may see some price increases.
● Medium term: As major steel mills release production capacity, the supply of wire rod in the market will gradually increase. If demand growth fails to keep pace with supply increases, prices may face some downward pressure. However, if demand remains strong, prices are likely to remain high.
● Late stage: Near the end of the year, market demand may weaken due to seasonal factors. For example, cold winter weather may halt some construction projects, reducing wire rod demand. During this period, if market inventory is high, prices may fall further. Conversely, if inventory remains at a reasonable level, prices may remain relatively stable.
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