Jan. 28 (Bloomberg) -- Steel reinforcement-bar futures dropped from the highest level in more than six months on concern that inventories are piling up in China as demand remains weak before the Lunar New Year holiday.
Rebar for delivery in May fell by 0.2 percent to close at 4,068 yuan ($653) a metric ton today on the Shanghai Futures Exchange. The most-active contract reached 4,085 yuan on Jan. 25, the highest price since July 6.
Rebar steel inventory in China gained for a fifth week to 6.26 million tons, according to the Shanghai Steelhome Information. The Chinese markets will be closed for the week- long New Year break, which commences Feb. 9 this year.
“Despite signs of improving macro economy, the demand in the spot market is conspicuously missing approaching the Lunar New Year,” Ren Xinlei, an analyst at Luzheng Futures Co., said in a report. “Inventory will rise again after the holiday.”
Spot iron ore at Tianjin port was unchanged at $148.60 a dry ton on Jan. 25, according to The Steel Index Ltd. The average spot price for rebar was at 3,729 yuan a ton on the same day, according to data from Beijing Antaike Information Development Co.
--Feiwen Rong. Editors: Thomas Kutty Abraham, Brett Miller