Steel reinforcement-bar futures fell for a second day, to the lowest level in more than six weeks as inventories in China climbed for a ninth week, adding to concern that the market is oversupplied.
Rebar for delivery in October on the Shanghai Futures Exchange dropped as much as 2.6 percent to 3,916 yuan ($629) a metric ton, the lowest level since Jan. 17 for a most-active contract, and was at 3,929 at 9:41 a.m. local time. Futures fell 1.8 percent last month, the first drop since November.
Inventory jumped 79 percent this year through March 1, according to Shanghai Steelhome Information. China is holding the annual gathering of the National People’s Congress this week to mark the once-in-a-decade leadership transition in Beijing. Outgoing Premier Wen Jiabao will outline economic policies as the government grapples with sustaining a recovery from the slowest growth in 13 years without triggering a resurgence in consumer and asset-price inflation.
“If the policies remain stable with no big stimulus post the National People’s Congress, as our base case is, we expect finished steel prices to fall due to the excessive inventory at traders,” Frankie Zhu, analyst at Credit Suisse Group AG, said in a report e-mailed today.
The average spot price for rebar was unchanged at 3,790 yuan a ton on March 1, after declining for five straight sessions, according to data from Beijing Antaike Information Development Co. Iron ore for immediate delivery fell 0.7 percent to $150.60 a ton on March 1, according to data compiled by The Steel Index Ltd.
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