April 30 (Bloomberg) -- Steel futures in Shanghai are poised for the largest monthly decline in three months on concern demand may ebb in China, the largest consumer and producer, as the government moved to cool its real-estate market.
Steel reinforcement bars for October delivery dropped as low as 4,577 yuan ($670) a metric ton yesterday on the Shanghai Futures Exchange, the lowest price since March 8. The contract gained 0.5 percent to 4,605 yuan at 11:13 a.m. The most-active contract has dropped 3.2 percent this month, the steepest loss since January.
The May-delivery wire-rod contract advanced 0.7 percent to 4,225 yuan a ton.
The government has in the past two weeks raised mortgage rates and down-payment ratios, barred lending for third-home purchases and ordered tighter scrutiny of developers’ financing to restrain property prices that surged at a record 11.7 percent in March.
“The short-term outlook for steel has been hurt by the measures the government has taken to curb property speculation,” Xie Shuguang, an analyst Dongguan Hualian Futures Co., said from Guangdong. “Stockpiles have fallen but considering we’re in the peak demand season now, they are not falling as fast as expected.”
Inventories of steel rebar in warehouses monitored by the Shanghai Futures Exchange have declined 16 percent from 192,009 tons in February, the highest level since futures started trading in August 2009.
“From a longer-term perspective, the controls will allow the property market to continue growing at a healthy pace, which is bullish for steel prices,” said Xie.