Shanghai rebar futures rose on Wednesday after the Shanghai Futures Exchange said it planned to cut trading fees for rebar contracts by nearly half from August, buoying
investor confidence and expectations of increased liquidity.
The exchange will cut transaction fees for its rebar contract to 0.006 percent from 0.01 percent, and for copper to 0.01 percent from 0.02 percent from Aug. 1, in a move to revive sagging liquidity by easing the costs burden for investors as well as brokers.
The most active rebar contract for October rose 0.59 percent to 4,920 yuan ($764) per tonne, after touching a one-week low on Tuesday.
Trading volumes of SHFE''s rebar futures plunged 67 percent in the first half of this year from a year earlier.
Analysts said the lower trading fee will allow more individual investors to trade futures and thus boost liquidity after the exchange introduced a slew of measures to curb speculation since last year.
Rising steel prices bode well for spot iron ore offers, with suppliers continuing to resist discounts and even wanting to fuel expectations of stronger demand in the world''s top steel producer China.
"A trader in China asked for $185 per tonne, including freight, for 63/63.5 Fe Indian fines yesterday, as steel prices have lent strong support for iron ore prices," said a senior iron ore trader in Shanghai.
"Traders have received more bookings than steel mills over the past few weeks," the trader added.
Offers for 62-grade Newman fines from Australia were steady at $179 to $181 a tonne, including freight, on Wednesday and quotes for Indian 63.5/63 ore were also unchanged at $182 to$184, Chinese industry consultancy Umetal said, both steady for nearly two weeks.
"Miners are asking for high prices, forcing traders to sell at even higher prices to steel mills, but transactions have been slowing down as mills become reluctant to build up more stocks due to high costs," said an iron ore trader in Beijing.
Global iron ore indexes, tracking spot prices and used by top miners to set quarterly iron ore pricing, extended gains and stood at their highest in more than two months.
The Steel Index for ore with 62-percent iron content edged up 20 cents to $175.50 a tonne, its highest since May 18, and Metal Bulletin''s 62-percent Fe iron ore index rose 14 cents to $175.03 a tonne, its highest since May 20.
The Platts index, a similar gauge , slipped 75 cents to $176.5 a tonne, but was still at a high level unseen since May 20.
Singapore Exchange-cleared iron ore swaps rose on Tuesday, with contracts between August to November rising more than $1.