Steel reinforcement-bar futures rose in Shanghai for the first time in four days as the lowest prices this year enticed purchases from construction and engineering companies preparing for China’s peak building season.
The contract for delivery in October gained as much as 1 percent to 3,761 yuan ($606) a metric ton on the Shanghai Futures Exchange, before trading at 3,745 yuan at 10:15 a.m. local time. Futures yesterday fell to the lowest price since mid December.
Futures dropped 4.5 percent in the first quarter and are 12 percent below their February high after the debt crisis in Cyprus renewed concerns about Europe and the Chinese government sought to rein in the property market. Spring is typically the peak consumption season for building projects and a support for prices, Xu Jiashun, an analyst at Yongan Futures Co., said by phone from Hangzhou today.
“Rebar has fallen too much too quickly and it’s natural we see a pullback at this stage as end-users step up purchases and help absorb some of the excessive inventory,” Xu said. “The latest property measures were more benign than people had anticipated, boosting demand for building material as well.”
Beijing, the capital, banned single-person households from buying more than one residence while Shanghai prohibited banks from giving credit to third-home buyers, according to the local administration websites. The two cities will also enforce a 20 percent tax on capital gains from property sales.
The average spot price of rebar fell 0.5 percent to 3,636 yuan a ton yesterday, according to Beijing Antaike Information Development Co. Spot iron ore at Tianjin port was little changed at $137.30 a dry ton March 28, according to The Steel Index Ltd.
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