Steel reinforcement-bar futures dropped for a second day on speculation that inventories will climb in China as construction slows during the winter and ahead of the Lunar New Year holidays.
Rebar for delivery in May fell as much as 0.6 percent to 4,043 yuan ($650) a metric ton on the Shanghai Futures Exchange and was at 4,060 at the 11:30 a.m. midday break. The most-active contract reached 4,085 yuan on Jan. 25, the highest price since July 6.
“There are very few sporadic purchases in the spot market as most of the construction sites are gradually halting activities approaching the Chinese New Year,” Yongan Futures Co. said in a report today. “There will also be less liquidity in the futures market as some investors chose to close out positions and leave the market before the holidays.”
Rebar steel inventory in China gained for a fifth week to 6.26 million tons, according to the Shanghai Steelhome Information. The Chinese markets will be closed for the week- long New Year break, which commences Feb. 9 this year.
Spot iron ore at Tianjin port was little changed at $148.40 a dry ton yesterday, according to The Steel Index Ltd. The average spot price for rebar was 3,733 yuan a ton yesterday, according to data from Beijing Antaike Information Development Co.
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