Steel reinforcement-bar futures advanced to the highest level in almost five months after data showed China’s manufacturing may expand at a faster pace and on speculation the government will announce investment plans.
Rebar for May delivery rose 2.8 percent to 3,786 yuan ($607) a metric ton on the Shanghai Futures Exchange, the highest price at close since July 19. Futures climbed 3.6 percent this week, paring losses to 10 percent this year.
The December preliminary reading was 50.9 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. That compares with the 50.8 median estimate in a Bloomberg survey of 12 economists. China’s central economic work conference this weekend may highlight urbanization, China Business News reported Dec. 12.
“Investors are betting the conference will set out plans for urbanization investment, an important driver of steel demand,” said Yu Yang, a Shanghai-based analyst with Shenyin Wanguo Futures Co. “Once such plans are announced, it may trigger a round of steel stockpiling, pushing prices higher.”
The average spot price of rebar in China was little changed at 3,582 yuan a ton today, according to the Beijing Antaike Information Development Co. Spot iron ore added 1.1 percent to $126.4 a dry ton yesterday at Tianjin port, according to a gauge compiled by The Steel Index Ltd.