Rebar Falls, Erasing Earlier Gains, After China Money Rates Jump

Steel reinforcement-bar futures in Shanghai fell, erasing earlier gains, after money-market rates in China surged as the central bank drained cash from the financial system.

Rebar for delivery in May, the most-actively traded contract, fell by 0.2 percent to close at 3,634 yuan ($597) a metric ton on the Shanghai Futures Exchange. That was the lowest close for the contract since July 1. It had gained as much as 0.5 percent earlier today.

China’s benchmark money-market rate jumped the most since July as the People’s Bank of China suspended selling reverse-repurchase contracts since Oct. 17. The nation’s consumer-price index rose the most since February last month and Song Quoqing, an academic adviser to the central bank, said on Oct. 20 the authority may tighten policy this year if inflation quickens.

“There’s concern in the market that the central bank might be shifting to tighter monetary policy to keep inflation in check,” said Xia Caijun, an analyst at GF Futures Co. in Guangzhou.

The spot price of rebar was little changed at 3,491 a ton yesterday, according to Beijing Antaike Information Development Co.

Iron ore for May delivery, the most-active contract by volume on the Dalian Commodity Exchange, fell 1 percent to close at 939 yuan a ton today. The commodity for immediate delivery at Tianjin port fell 0.8 percent to $134.30 a dry ton yesterday, according to a price index compiled by The Steel Index Ltd.