Jan. 7 (Bloomberg) -- Steel reinforcement-bar futures in Shanghai declined to the lowest level in more than seven months as China’s Cabinet was said to have imposed new controls on lending outside the banking system.
Rebar for May delivery on the Shanghai Futures Exchange lost 1.4 percent to 3,465 yuan ($573) a metric ton, the lowest close for the contract since its inception in May.
The new controls on the multi-trillion-dollar shadow banking industry target off-the-books loans and shore up enforcement of current rules, three people familiar with the matter said. China has pledged to rein in a steep rise in debt built up by state enterprises and local governments, which has fueled a construction and real estate boom in recent years, said Wang Yongliang, an analyst at Beijing Cifco Futures Co. in Tianjin.
“If financial conditions were to get tight, it would be particularly bearish for the building material,” Wang said.
Rebar for immediate delivery tracked by Beijing Antaike Information Development Co. fell for a third day, dropping 0.4 percent to 3,454 yuan a ton.
Iron ore for May delivery on the Dalian Commodity Exchange gained 0.3 percent to 896 yuan a ton. The contract for immediate delivery at the port of Tianjin tracked by The Steel Index fell 0.2 percent yesterday to $134.80 a dry ton.
--Feiwen Rong. Editors: Jarrett Banks, Sungwoo Park