Bloomberg News

Rebar Declines From Five-Month High on China Property Concerns

December 27, 2012

Steel reinforcement-bar futures dropped for the first time in three days on concern that China will maintain curbs on real estate investment next year, limiting housing construction.

Rebar for delivery in May lost 0.2 percent to close at 3,869 yuan ($620) a metric ton on the Shanghai Futures Exchange. The contract climbed to 3,958 yuan earlier today, the highest most-active price since July 10, on expectations China’s investments in railways and urbanization plans will boost demand. Futures have advanced 11 percent this month, trimming the 2012 loss to 8.1 percent.

China will keep in place home-purchase restrictions and will “strictly” curb speculation in 2013, the official Xinhua News Agency reported Dec. 25, citing the Ministry of Housing and Urban-Rural Development. Daily crude steel output in mid- December fell 1.7 percent to 1.91 million tons compared with early-December, said researcher Custeel.com, citing data from the China Iron & Steel Association.

“The risk of housing market curbs is a real concern, and the government will likely keep a tight lid on lending to the housing sector next year,” Wu Zhili, an analyst at Shenhua Futures Co., said by phone from Shenzhen. “These are bearish factors for the rebar market,” he said.

In its more than two-year effort to rein in prices, China has implemented measures including raising down-payment and mortgage requirements for second homes, imposing a property tax for the first time in Shanghai and Chongqing and introducing home-purchase curbs in about 40 cities.

The average spot price for rebar rose 0.3 percent to 3,621 yuan a ton yesterday, according to data from Beijing Antaike Information Development Co. Spot iron ore at Tianjin port was unchanged at $135.40 a dry ton yesterday, data compiled by The Steel Index Ltd. showed.

To contact Bloomberg News staff for this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net


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