Jan. 16 (Bloomberg) -- Steel reinforcement-bar futures dropped for the first time in three days in Shanghai amid concern that China’s tightening money market conditions may crimp demand for the building material.
Rebar for May delivery on the Shanghai Futures Exchange retreated 0.5 percent to close at 3,481 yuan ($576) a metric ton. Futures ended at 3,498 yuan yesterday, the highest close for a most-active contract since Jan. 6.
China’s benchmark money-market rate surged by the most this month as the central bank refrained from adding funds even as dealers expect tax payments and pre-holiday demand to reduce the supply of cash. Aggregate financing, the government’s broadest measure of credit, declined to 1.23 trillion yuan last month from 1.63 trillion yuan a year earlier, the People’s Bank of China said yesterday.
“China’s money market is getting tight this year, which is a bearish factor for the entire steel industry,” said Wu Zhili, an analyst at Shenhua Futures Co. in Shenzhen.
Iron ore futures for May delivery on the Dalian Commodity Exchange closed unchanged at 879 yuan a ton today. The steel- making ingredient for immediate delivery at the port of Tianjin tracked by The Steel Index was little changed at $129.60 a dry ton yesterday.
Rebar for immediate delivery tracked by Beijing Antaike Information Development Co. was little changed today at 3,427 yuan a ton.
--Feiwen Rong. Editors: Sungwoo Park, Jarrett Banks