Steel reinforcement-bar futures climbed to a five-month high after a gauge of demand in China rose in December and on speculation that traders are boosting stockpiles before construction activity picks up in spring.
Rebar for delivery in May gained 0.1 percent to end at 3,990 yuan ($640) a metric ton on the Shanghai Futures Exchange, the highest closing price for the most active contract since July 10. The price earlier rose as much as 0.9 percent to 4,023 yuan. Futures advanced 1.9 percent for a fifth weekly gain, the best run since March. The market reopened today after a three-day closure for New Year holidays.
China’s steel industry purchasing manager’s index climbed to 55.5 last month from 49.2 in November, data compiled by the National Bureau of Statistics, China Federation of Logistics and Purchasing and Xiben New Line showed. Some large traders have begun stockpiling products, Luzheng Futures Co. said in a report dated Dec. 31. China is the world’s biggest consumer of steel.
“China’s economic growth is looking certain to be picking up and that reinforces the sentiment that demand will rebound,” Ren Xinlei, an analyst at Luzheng Futures, said by phone from Jinan. The winter-stockpiling also supports that view, he said.
Rebar surged 14 percent in December, the most since July 2009, as China’s economy headed for a rebound in the final three months of the year after a seven-quarter slowdown as the government increased infrastructure spending and accelerated investment-project approvals.
The average spot price for rebar advanced 0.9 percent to 3,676 yuan a ton, the highest since Nov. 22, according to data from Beijing Antaike Information Development Co. Spot iron ore at Tianjin port jumped 3.4 percent to $149.80 a dry ton on Jan. 3, the highest Oct. 18, 2011, data compiled by The Steel Index Ltd. showed.