Reuters reported that Shanghai rebar steel futures climbed more than 1% on Wednesday to their highest since May on expectations demand will pick up after a week long holiday in February.

The most active May rebar contract for May delivery on the Shanghai Futures Exchange hit a session high of CNY 4,123 (USD 660) a tonne, its loftiest since May 14, 2012. It was up 1.4% at CNY 4,117 by the midday break.

The price rise reflects expectations for better demand after the Chinese New Year when construction and manufacturing activities usually rise.

A Shanghai based iron ore trader said that "Some steel traders have been restocking some products in anticipation that demand will kick in after the holiday. Right now, most construction projects have already stopped for the holiday so spot demand is not good.”

Rebar followed gains in other Shanghai traded commodities such as copper and rubber as risk appetite increased after upbeat US housing data strengthened hopes the global economy will be on better footing this year.

But it may not immediately translate to more demand for iron ore in the spot market, traders said, with most Chinese mills adequately stocked for the Lunar New Year break.

Source - Reuters