Jan. 2 (Bloomberg) -- Steel reinforcement-bar futures in Shanghai climbed for the first time in three days as rising new home prices in China signaled housing construction will increase and a manufacturing gauge showed continued expansion.
Rebar for May delivery on the Shanghai Futures Exchange gained 0.6 percent to close at 3,590 yuan ($593) a metric ton. The most-active contract lost 2.7 percent last month.
The average price for new homes rose 12 percent in December from a year earlier, according to SouFun Holdings Ltd., the nation’s biggest real estate website owner. Supply shortages remain noticeable in some cities, it said. China’s purchasing managers’ index last month came in at 50.5, compared with 50.8 the previous month, according to HSBC Holdings Plc and Markit Economics. A figure above 50 indicates expansion.
“Housing demand is still growing and that helps maintain consumption for rebar,” said Hu Xiaodong, an analyst at Nanhua Futures Co. in Hangzhou. “The PMI shows manufacturing is still expanding, albeit somewhat slower, and expansion is good for steel demand.”
Iron ore for May delivery on the Dalian Commodity Exchange slipped 0.4 percent to 907 yuan a ton. The contract for immediate delivery at the port of Tianjin tracked by The Steel Index was unchanged at $134.20 a dry ton on Dec. 31.
Rebar for immediate delivery tracked by Beijing Antaike Information Development Co. was little changed at 3,499 yuan a ton today.
--William Bi. Editors: Sungwoo Park, Ovais Subhani