Steel reinforcement-bar futures in Shanghai fell for a second day as liquidity waned ahead of the week-long Lunar New Year holiday and as a gap between futures and spot prices stoked concern demand will weaken.
Rebar for delivery in May fell by 0.8 percent to close at 4,109 yuan ($659) a metric ton on the Shanghai Futures Exchange. It rose to 4,235 yuan on Feb. 4, the highest since May 7.
The average spot price for rebar was little changed today at 3,790 yuan a ton, according to data from Beijing Antaike Information Development Co. China’s markets will be closed all of next week for the Lunar New Year holidays.
“The gap between futures and spot prices is an indication that spot demand can’t catch up,” Zhang Jizhou, a steel trader at Shanghai Flow International Trade Co., said by phone from Shanghai today. “Big institutional money has mostly left the market ahead of the holiday.”
Aggregate open interest of rebar contracts traded on the Shanghai bourse, fell for the third day today to 1.34 million contracts, a sign that Chinese investors are pulling money out of the market before the holiday, Zhang said.
Spot iron ore at Tianjin port was unchanged at $154.20 a dry ton yesterday, according to The Steel Index Ltd.
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