Steel reinforcement-bar futures traded near the highest level in nearly two weeks as investors waited for more signs that a seasonal demand recovery will help absorb inventory of the building material in China.
The contract for October delivery on the Shanghai Futures Exchanged gained as much as 0.4 percent to 3,862 yuan ($623) a metric ton, the highest intra-day level since March 28, and was at 3,850 yuan at 10:39 a.m. Futures have declined 3.5 percent this year.
Demand for rebar in the spot market has gathered pace recently with construction companies gradually starting infrastructure and real estate projects in spring, Wang Yongliang, an analyst at Beijing Cifco Co., said by phone from Tianjin today. The average spot price of rebar increased 0.2 percent to 3,644 yuan a ton yesterday, according to Beijing Antaike Information Development Co.
“This is only the beginning and usually more construction projects will start in the second half of April and in May,” Wang said. “We expect to see a steady increase in demand.”
Infrastructure investment will accelerate with the renovation of an “urban villages” project announced in the government’s 12th Five-Year Plan, analyst Minggao Shen at Citigroup Inc., wrote in a report dated April 8.
The spot iron ore at Tianjin port gained 1.1 percent to $139.10 a dry ton yesterday, according to The Steel Index Ltd.
To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Brett Miller at email@example.com