Steel reinforcement-bar futures fell after data showed inventories gained for a third week in China, deepening concern that rising supplies will outpace demand as winter slows construction.
Rebar for May delivery dropped 0.7 percent to 3,977 yuan ($640) a metric ton on the Shanghai Futures Exchange. Futures gained 2 percent yesterday, the most at close since Dec. 25, on speculation China’s economy is accelerating.
Rebar inventory in China rose to 5.8 million tons on Jan. 11, the highest since Oct. 12, according to data from Shanghai Steelhome Information Technology Co. Spot prices fell for a third day yesterday, according to Beijing Antaike Information Development Co.
“There isn’t enough demand to sustain current prices,” Yu Yang, an analyst at Shenyin Wanguo Futures Co., said by phone from Shanghai. “The market is back to the dull fundamentals after having digested the bullish euphoria over future demand.”
Futures rose yesterday after a Bloomberg survey showed China’s economic growth may have recovered to 7.8 percent in the fourth quarter from a year earlier, after sliding to a three-year low of 7.4 percent in the previous quarter. The official data is due on Jan. 18.
The average spot price for rebar fell 0.1 percent to 3,735 yuan a ton, according to data from Beijing Antaike. Spot iron ore at Tianjin port dropped 0.2 percent to $154.60 a dry ton yesterday, according to The Steel Index Ltd.