Steel reinforcement-bar futures in Shanghai fell for the third week as inventory climbed and the government tightened rules to curb property investment.
Rebar for delivery in October on the Shanghai Futures Exchange fell by 0.1 percent to close at 3,928 yuan ($632) a metric ton, bringing this week’s loss to 2.3 percent. The most-active contract on March 4 closed at 3,905 yuan, the lowest level since Dec. 27.
Inventory jumped 79 percent this year through March 1, according to Shanghai Steelhome Information. Along with the higher down payments and borrowing costs for second-home mortgages in cities with “excessively fast” price gains, authorities ordered stricter enforcement of taxes on sales as they step up a three-year campaign to cool the housing market.
“Rebar was considerably weakened after the government made it clear that they want to rein in property investment,” Xia Caijun, analyst at GF Futures Co., said in a report today. “Sentiment was gravely hurt, leading to lower transaction volume and the inventory is piling up.”
The central bank’s regional branches may implement the measures in accordance with the price-control targets of local governments, the State Council said in a statement on its website March 1. Individuals selling properties should pay a 20 percent tax on profits from sales when the original purchase price is available, according to the statement.
The average spot price for rebar fell 0.1 percent today to 3,759 yuan a ton, according to data from Beijing Antaike Information Development Co. Iron ore for immediate delivery rose 0.3 percent to $146.30 a ton yesterday, according to data compiled by The Steel Index Ltd.