Feb. 19 (Bloomberg) -- Steel reinforcement-bar futures climbed in Shanghai from the lowest level this month on speculation that demand for the building material will increase as construction projects resume after China’s biggest holiday.
Rebar for delivery in October advanced 0.3 percent to 4,186 yuan ($670) a metric ton on the Shanghai Futures Exchange. The metal fell 2.4 percent yesterday after the Chinese market opened from a week-long Lunar New Year holiday.
The spot price for rebar rose to the highest since July, according to Beijing Antaike Information Development Co. The price of iron ore also gained, giving steel mills more leverage to charge higher prices for their products, Beijing Cifco Futures Co. wrote in a research report today.
“The market expects demand to revive as warmer weather allows housing and rail construction to pick up,” Wu Zhili, analyst at Shenhua Futures Co., said by phone from Shenzhen in southern China. “Firm spot prices have given traders solid rationale to buy after yesterday’s big drop.”
The average spot price for rebar advanced 1.1 percent to 3,879 yuan today, after gaining 1.2 percent on the first day of trading since the week-long holiday, according to Beijing Antaike. Spot iron ore at Tianjin port yesterday rose 1.4 percent to $157.20 a dry ton, according to The Steel Index Ltd.
--William Bi. Editors: Thomas Kutty Abraham, Jarrett Banks