Prices for Chinese construction steel rebar rose on Wednesday and were on track for their best one-day performance in over a week, buoyed as the government said it would boost spending on infrastructure.
The National Development and Reform Commission (NDRC), the top state planner in the country, said in a news briefing on Tuesday that China would ramp up investment in infrastructure, as well as in agriculture, poverty alleviation and environmental protection.
It also said it would speed up construction on infrastructure projects that have already been approved.
“(The NDRC statement) helped to shore up the confidence of investors towards steel-demand in the long-term and drove up steel prices,” analysts at CITIC Futures said in a note in Mandarin.
Steel consumption from infrastructure projects accounted for nearly 20 percent of total usage of the commodity last year.
However, worries over the latest escalation in the tit-for-tat trade dispute between Washington and Beijing could drag on the market.
Beijing on Tuesday quickly added $60 billion of U.S. products to its import tariff list in retaliation for President Donald Trump’s planned levies on $200 billion worth of Chinese goods.
The most-active rebar contract on the Shanghai Futures Exchange climbed 1.1 percent to 4,177 yuan ($608.71) a tonne, on course for its biggest one-day gain since Sept. 10.
Prices of steelmaking raw materials also rose. Dalian iron ore futures had advanced 1.3 percent to 510 yuan a tonne by 0147 GMT.
The most-traded coking coal futures edged up 0.4 percent to 1,298 yuan a tonne, while the coke contract for January delivery rose 1.9 percent to 2,321.5 yuan.