Rebar Falls to Eight-Month Low as China’s Economic Growth Slows

Jan 20, 2014 3:45 am ET

Jan. 20 (Bloomberg) -- Steel reinforcement-bar futures in Shanghai declined to the lowest price since May as China’s economic growth slowed and the benchmark money-market rate jumped. Iron ore prices slumped.

Rebar for May delivery on the Shanghai Futures Exchange fell 0.6 percent to close at 3,451 yuan ($570) a metric ton, the lowest price for the contract since its inception on May 17. It has lost 3.3 percent this year.

China’s gross domestic product grew 7.7 percent in the fourth quarter, compared with 7.8 percent the previous period, official data showed today. The nation’s benchmark money-market rate jumped by the most in seven months as pre-holiday cash demand and corporate tax payments drained funds from the banking system. The Lunar New Year holidays start on Jan. 31.

“There’s general concern in the market that a cash crunch may persist, adding pressure on the outlook for this year,” said Gao Bo, an analyst at Mysteel.com in Shanghai.

Prices also fell after data showed China’s crude steel output reached a record last year. Production rose 7.5 percent to 779.04 million tons in 2013, the National Bureau of Statistics said today in Beijing.

Iron ore futures for May delivery on the Dalian Commodity Exchange retreated 1.7 percent to close at 861 yuan a ton, the lowest since the contract’s Oct. 18 debut. The steel-making material for immediate delivery at the port of Tianjin tracked by The Steel Index fell 0.8 percent to $127.30 a dry ton on Jan. 17, the lowest since July 15.

Rebar for immediate delivery tracked by Beijing Antaike Information Development Co. was little changed at 3,415 yuan a ton, the lowest since July 15.

--Feiwen Rong. Editors: Sungwoo Park, Brett Miller