Breaking News

Tweet TWEET

Rebar Falls for Second Day on Supply Concern, China Flash PMI

Steel reinforcement-bar futures fell for a second day amid concerns that production is too high at local mills and after a preliminary reading of China’s manufacturing in April trailed estimates.

The contract for October delivery on the Shanghai Futures Exchange declined by as much as 1.2 percent to 3,605 yuan ($584), before trading at 3,625 at 10:42 a.m. local time. Futures lost 4 percent last week, the biggest weekly decline since Feb. 22.

A preliminary reading of a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics stood at 50.5. That compares with 51.5 in a Bloomberg News survey, and a final reading of 51.6 in March. China approved more steel-mill capacity yesterday, giving the go-ahead to Shandong Steel Co.’s 8.5 million ton-a-year plant in Rizhao, according to the National Development and Reform Commission.

“Supply is weighing on market sentiment as demand remains tepid,” Lv Xiaohua, analyst at Everbright Futures Co., said by phone from Shanghai today. “Worries about iron ore prices also depressed sentiment.”

Spot iron ore at Tianjin port was unchanged at $138 a dry ton yesterday, the lowest since April 8, the Steel Index Ltd. data show. Iron ore prices may average $125 a ton in the fourth quarter, compared with a previous estimate at $130 made in January, Morgan Stanley said in a report today.

The average spot price for rebar dropped 0.3 percent to 3,584 yuan a ton yesterday, according to the Beijing Antaike Information Development Co.

To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at frong2@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.