Steel reinforcement-bar futures in Shanghai fell to a one-month low as Chinese mills boosted output and iron ore prices tumbled to the lowest in four weeks.
Rebar for January delivery on the Shanghai Futures Exchange fell by 0.2 percent to close at 3,723 yuan ($608) a metric ton, the lowest price at close for a most-active contract since Aug. 7. Futures lost 0.8 percent this week.
Iron ore for immediate delivery at Tianjin port fell 0.7 percent yesterday to $137.10 a dry ton, the lowest price since Aug. 7, according to a price index compiled by The Steel Index Ltd. Chinese steel mills’ daily crude steel output reached an average 2.1 million tons in the first 20 days of August, compared with 1.9 million tons at the end of 2012, according to China Iron and Steel Association.
“The steel mills’ output remained at a high level, which will slow the destocking process in the market,” said Wu Zhili, an analyst at Shenhua Futures Co. in Shenzhen. “Rebar prices are under pressure from both high output and lower raw material prices.”
The average spot price of rebar retreated 0.3 percent to 3,594 yuan a ton, the lowest level since Aug. 16, according to Beijing Antaike Information Development Co.