Steel reinforcement-bar futures in Shanghai fell with iron ore as inventory of the raw material in China surged and freezing temperatures slowed construction projects.
Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, fell by 0.5 percent to close at 3,693 yuan ($606) a metric ton today. It closed at the highest since Oct. 14 yesterday.
Domestic iron ore stockpiles advanced for a fourth week to a one-year high of 80.1 million tons on Nov. 29, according to data from Beijing Antaike Information Development Co. Sub-zero temperatures in northern China are shutting down construction, according to Shang Jinyu, a Zhengzhou-based analyst at Zhongyuan Futures Co.
“Traders are concerned the recent rally led by strong iron ore prices is unsustainable given the huge inventories of ore,” Shang said. “Demand will continue to slow as the colder weather halts construction.”
Iron ore for May delivery on the Dalian Commodity Exchange fell 0.7 percent to 945 yuan a ton. The steel-making material for immediate delivery at Tianjin port tracked by The Steel Index rose 1.1 percent to $139.70 a dry ton yesterday.
Rebar for immediate delivery tracked by Beijing Antaike Information Development Co. was little changed today at 3,553 yuan a ton.