The price of coils and wire rod cannot be followed separately from rebar and billets; they all belong to the same family and derive their prices from the same chain. A market participant who understands this relationship can anticipate the direction of coil prices sooner.
Why Coils Are Tied to Rebar and Billets
Coils and rebar are both produced from steel billets through similar hot-rolling processes, and they have round cross-sections. The base price of billets and sections is discovered weekly on the Iran Mercantile Exchange, and part of this formula depends on the dollar exchange rate. When billet prices rise, coil prices also increase with a slight delay, almost simultaneously with rebar.
The price of coils does not move separately from billets and rebar; monitoring this chain provides a more complete picture.
Key Factors at a Glance
| Factor | Effect on the Price of Coils and Wire Rod |
|---|
| Billet and rebar prices | The primary basis; coils move almost simultaneously with rebar |
| Dollar exchange rate | Part of the base price on the Iran Mercantile Exchange depends on the dollar |
| Coil grade (drawn/ordinary) | Drawn coils such as RST34 are more expensive than ordinary construction coils |
| Galvanized coating | Galvanized wire rod is more expensive than black wire rod because of its zinc coating |
How to Use This Understanding
- Follow billet and rebar prices as closely as you monitor coil prices.
- Know the price difference between drawn and ordinary coils so that you can quote the right option for each customer.
- Consider zinc prices and the galvanizing rate separately for galvanized wire rod.
Anyone who sees coils as part of the rebar and billet family understands the market’s direction much sooner than someone who only looks at the current coil price.
A Practical Point for Daily Monitoring
If you do not have time to monitor the coil market separately, monitoring the price of plain rebar alone provides a good picture of the direction of coil movements, because the two usually move with only a small difference between them. You only need to be more alert when news is published about global zinc prices or galvanizing restrictions; in that case, galvanized wire rod can move independently of ordinary rebar.
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