May 18, 2015 / 3:58 AM / 5 years ago

China rebar futures fall for 5th day, property sector drags

* Tepid steel demand continues to weigh on prices
    * Iron ore futures rise to catch up with spot prices

    SHANGHAI, May 18 (Reuters) - Chinese rebar futures fell for
the fifth straight session on Monday as a cooling economy and
property sector pressured demand in the world's top producer.
    Steel mills have ramped up production, shrugging off the
slow pick-up in demand, raising concerns that the increasing
supply glut could further dampen prices and force mills to rein
in output. 
    "China is expected to roll out more stimulus to bolster the
economy, but the overcapacity will keep weighing on steel
prices, which I think have touched the bottom but will stay at
low levels," said Zhou Guangyan, an analyst with Zhongcai
Futures in Shanghai.
    The most-traded rebar futures contract for October
settlement on the Shanghai Futures Exchange had dipped
0.25 percent to 2,355 yuan ($379.71) by the midday break. Prices
have dropped 13 percent so far this year. 
    Some steel mills have cut sale prices and increased exports
in order to lower inventories and ease cash tightness, industry
sources said. 
    China's real estate investment growth continued to slow in
the first four months of 2015 to the lowest since May 2009 as
new construction weakened, and new home prices in 70 major
cities fell for the eighth consecutive month in April from a
year ago, down 6.1 percent.  
    The benchmark September iron ore futures contract on the
Dalian Commodity Exchange had edged up 0.8 percent to
425.5 yuan before the midday break, due to a discount of up to
50 yuan against spot prices.
    The continued fall in iron ore inventories at major ports
over the past few weeks as mills beefed up restocking has driven
up prices for the raw material by 20 percent since April.
    Iron ore for immediate delivery to China's Tianjin port
.IO62-CNI=SI fell for the fourth straight day, down 0.3
percent to $61 a tonne on Friday, according to the Steel Index,
as steel mills slowed restocking.
  Rebar and iron ore prices at 0339 GMT                                       
                                                                              
  Contract                          Last    Change   Pct Change               
  SHFE REBAR OCT5                   2355     -6.00        -0.25               
  DALIAN IRON ORE DCE DCIO SEP5    425.5     +3.50        +0.83               
  SGX IRON ORE FUTURES JULY         55.2     -0.17        -0.31               
  THE STEEL INDEX 62 PCT INDEX        61     -0.20        -0.33               
  METAL BULLETIN INDEX             61.31     -0.99        -1.59
                                                                              
                                                                              
  Dalian iron ore and Shanghai rebar in yuan/tonne                            
  Index in dollars/tonne, show close for the previous trading day             
 ($1 = 6.2021 Chinese yuan renminbi)

 (Reporting by Ruby Lian and David Stanway; Editing by Joseph
Radford)
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