Steel reinforcement-bar futures in Shanghai climbed after China’s central bank added liquidity into the money market in an effort to lower the cost of funding.
Rebar for delivery in May, the most-active contract by volume on the Shanghai Futures Exchange, rose 0.6 percent to close at 3,608 yuan ($592) a metric ton.
The People’s Bank of China added 13 billion yuan into the system via the first reverse-repurchase operation in two weeks. The seven-day repurchase rate, a gauge of short-term liquidity in China, dropped as much as 20 basis points to 4.8 percent before rebounding to 5.04 percent.
“Investors were worried about a liquidity squeeze, but the central bank seems to be showing there’s no shift to tighter policy yet,” said Ren Xinlei, an analyst at Luzheng Futures Co. in Jinan.
The spot price of rebar was little changed at 3,483 yuan a ton, according to Beijing Antaike Information Development Co.
Iron ore for immediate delivery at Tianjin port, tracked by the Steel Index, lost 1.1 percent to $131.80 a dry ton yesterday.
Iron ore futures for May delivery on the Dalian Commodity Exchange fell 0.2 percent to 921 yuan a ton.