Steel reinforcement-bar futures rose for a second day after the government said spending on railways will increase this year, boosting demand for the construction material in the world’s biggest consuming nation.
Rebar for delivery in May rose as much as 1 percent to 3,987 yuan ($641) a metric ton on the Shanghai Futures Exchange, before trading 3,967 yuan at 10:14 a.m. local time. The alloy is set to rise 1 percent this week, the sixth weekly gain in the last seven weeks.
The government will spend 650 billion yuan this year on railway construction, more than the 631 billion spent last year, Xinhua News Agency said, citing Minister of Railways Sheng Guangzu. China will also attract private capital participation in rail projects by setting up a national railway development fund as an investment platform, according to Xinhua.
“Spending on railways and other public infrastructure projects is bullish for rebar,” Wu Zhili, analyst at Shenhua Futures Co., said by phone from Shenzhen. “The market is returning its attention to the positive outlook in the medium-term.”
The average spot price for rebar is little changed at 3,733 yuan a ton yesterday, according to data from Beijing Antaike Information Development Co. Spot iron ore at Tianjin port was unchanged at $145.40 a dry ton yesterday, according to The Steel Index Ltd.