Maanshan Iron & Steel (600808) Co., one of China's biggest producers of construction steel, led a gain in the nation's steel stocks, advancing by the 10 percent daily limit on speculation higher prices will boost profit.
Maanshan's yuan-denominated stock rose 0.82 yuan to close at 9.06 yuan on the Shanghai Stock Exchange, the highest closing since May 29. The price of so-called reinforcement bars, known as rebars and used in buildings, rose to the highest in more than two years.
China has encouraged steelmakers to shift output into sheets and plates, used in automobiles and appliances, to curb a domestic glut of rebars. The slower expansion of construction steel output led to its prices rising faster than those of so- called flat products, analysts including Lin Hai said.
``Maanshan Steel outpaces its peers partly because of the stronger rebar prices,'' said Lin, a Shanghai-based steel analyst with Guotai Asset Management Co., which oversees $1.8 billion worth of assets.
Among other companies, stock in Baoshan Iron & Steel Co., China's biggest mill, rose 6.5 percent to close at 14.88 yuan, while Wuhan Iron & Steel Co. gained 8.1 percent to 14.49 yuan.
The price of rebars has gained 20 percent this year to 3,674 yuan ($486) a ton, beating the 2.8 percent increase in the price of hot-rolled sheets, according to research firm Beijing Antaike Information Development Co. That is the highest price for rebars since April 6, 2005.
Maanshan Steel's new cold-rolling plant will also open later this year, making as much as 5 million tons of steel sheets annually, analysts including Antaike's Ma Haitian said.
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