Steel reinforcement-bar futures in Shanghai dropped for the first time in six days on speculation that demand for winter stockpiling was waning in China, the world’s biggest consumer and producer.
Rebar for delivery in May lost 0.3 percent to close at 3,998 yuan ($642) a metric ton on the Shanghai Futures Exchange. The most-active contract reached 4,047 yuan on Jan. 7, the highest level since July 10.
Prices 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. Traders boost stockpiles before construction activity picks up in spring. Iron ore climbed to the highest price in almost 15 months yesterday.
“All the recent bullish factors have been priced in at this point, so a retreat and consolidation looks natural as demand from winter stockpiling draws to an end,” Wang Yongliang, an analyst at Beijing CIFCO Futures Co., said a report today.
Spot iron ore at Tianjin port gained 3 percent to $158.50 a dry ton yesterday, the highest level since Oct. 13, 2011, data compiled by The Steel Index Ltd. showed. The average spot price for rebar was at 3,774 yuan a ton today, unchanged from Jan. 7 when it reached the highest level since Oct. 15, according to data from Beijing Antaike Information Development Co.