Chinese wire rod export prices trended higher this week, even as export transactions remained subdued.

Kallanish assesses 6.5mm diameter mesh-grade wire rod at $530/tonne fob China, up $5/t from a week earlier.

Major wire rod exporters in northeast China kept their export prices stable at $530/t fob China this week, but few deals were concluded. A trader told Kallanish that no additional discounts were heard from mills this week. "Market sentiment has been revived going into July, so mills want to keep prices firm," another trader said.

Meanwhile, non-alloy wire rod prices from China have risen slightly, especially as rumours of customs inspections have made the market nervous. Wire rod produced by small mills in Hebei Province was trading at $510/t cfr Manila at the beginning of this week, but by Thursday this offer had risen by $5-10/t, market sources said. This was because of rumours that hundreds of thousands of tonnes of steel products exported without full VAT payment were being detained by customs. However, the rumours have not been confirmed.

Chinese steel exports have reached a historical high level this year amid domestic oversupply. In this context, some exporters evaded paying full value-added tax or export tariffs to reduce export sales prices in order to promote volumes. This has led to an increase in steel imports from China in neighbouring countries, triggering trade protection measures in some countries and causing complaints from destination markets. Customs inspections could limit the export of low-priced resources, thereby pushing up the export prices of Chinese steel products.