Steel reinforcement-bar futures in Shanghai fell to a 16-month low as prices of steel-making materials slumped.
Rebar for May delivery on the Shanghai Futures Exchange retreated by 1.2 percent to 3,410 yuan ($564) a metric ton. That’s the lowest closing price for a most-active contract since Sept. 7, 2012.
Iron ore futures for May delivery on the Dalian Commodity Exchange slid 1.6 percent to close at 847 yuan a ton, the lowest since the contract’s Oct. 18 debut. Coke futures on the bourse fell for a fifth day and closed at 1,342 yuan a ton, the lowest for a most-active contract since Sept. 6, 2012.
“Profit margins at most Chinese steelmakers are negative at the moment,” said Li Jinlu, an analyst at Yongan Futures Co. in Hangzhou, China’s largest commodity brokerage. “They refrained from purchasing raw materials, leading to declines in the cost of production and even lower steel prices.”
Concern that China’s economic growth is slowing also made for “a bearish start to the year,” he said. Gross domestic product expanded 7.7 percent from a year earlier in 2013’s final quarter, China’s statistics bureau said yesterday, compared with 7.8 percent in the previous period.
Iron ore for immediate delivery at the port of Tianjin tracked by The Steel Index slumped 2 percent yesterday to $124.80 a dry ton, the cheapest since July 10.
Rebar for immediate delivery tracked by Beijing Antaike Information Development Co. was little changed at 3,413 yuan a ton today, the lowest since July 12.