Rebar Retreats From Near 6-Month High Ahead of New Year Holiday
Steel reinforcement-bar futures retreated from near the highest level in six months as construction activity in China slows ahead of a week-long holiday.
Rebar for May delivery fell as much as 0.8 percent to 3,971 yuan ($638) a metric ton on the Shanghai Futures Exchange and was at 3,992 yuan at 10:59 a.m. local time. The contract reached 4,047 yuan on Jan. 7, the highest since July 10.
“Construction activity will slow gradually as China is approaching the most-important Lunar New Year holiday, which will reduce demand,” Ren Xinlei, an analyst at Luzheng Futures Co., said in a report today.
China, which produces almost half of the world’s steel, boosted output by 3.1 percent last year as economic expansion spurred demand for roads and railways. Steel production increased to 716.5 million tons in 2012 and rose 7.7 percent in December from a year earlier to 57.66 million tons, the National Bureau of Statistics said on Jan. 18.
The government will spend 650 billion yuan this year on railway construction, more than the 631 billion yuan spent last year, Xinhua News Agency reported on Jan. 17, citing Minister of Railways Sheng Guangzu.
The average spot price of rebar was little changed at 3,730 yuan a ton on Jan. 18, according to data from Beijing Antaike Information Development Co. Spot iron ore at Tianjin port dropped 0.2 percent to $145.10 a dry ton on Jan. 18, according to The Steel Index Ltd.
To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at firstname.lastname@example.org