Steel climbs

MANILA: Shanghai rebar steel futures climbed more than 1 percent to trade near a two-month high, extending recent gains on expectations of tighter supply and a demand pick-up as China boosts infrastructure spending.

The price of the construction steel product posted its best weekly gain in five, with the rally also pushing up Chinese iron ore futures this week to the highest since their launch in October 2013.The most-active rebar on the Shanghai Futures Exchange closed up 1.5 percent at 3,473 yuan ($506) a tonne.

The contract rose 5.5 percent this week after hitting 3,509 yuan on Thursday, its strongest since Dec. 12. On the Dalian Commodity Exchange, the most-traded iron ore rose 0.4 percent to 702 yuan per tonne.  The steelmaking raw material touched a record high of 721 yuan on Thursday and gained 4.7 percent this week.

Traders are building stocks of steel products on expectations of reduced supply after the Chinese government, in efforts to control smog, told mills in the Beijing-Tangshan-Hebei region to limit their utilisation capacity to 50 percent if air quality deteriorates, said Richard Lu, analyst at CRU consultancy in Beijing.