Steel reinforcement-bar futures in Shanghai gained for the first time in six days as investors bought the building material because they expect high production costs to support the price.
Rebar for October delivery rose 0.7 percent to close at 3,985 yuan ($640) a metric ton on the Shanghai Futures Exchange. The most-active contract has declined 3.4 percent this month, the biggest drop since November.
Iron ore has surged 75 percent from a near three-year low in September as China’s growth rebounded from a seven-quarter slowdown. Iron ore for immediate delivery was unchanged at $151.90 a ton yesterday, trading near 16-month high, according to data compiled by The Steel Index Ltd.
“Raw-material costs will continue to provide certain support for rebar prices,” Wu Zhili, analyst at Shenhua Futures Co., said in a report today. “Any news on hurricane or transport problems in Australia is bullish for iron ore.”
Severe Tropical Cyclone Rusty was bearing down on north-west Australia’s Port Hedland today, the world’s biggest bulk export terminal.
The average spot price for rebar fell 0.3 percent to 3,811 yuan a ton today, according to data from Beijing Antaike Information Development Co.