BEIJING (Reuters) - China’s construction steel rebar prices fell for a second day on Tuesday, pulled down in the wake of data that showed slowing growth in the Chinese economy and amid an intensifying trade spat with the United States.
China’s economy expanded at a slower pace in the second quarter as Beijing’s efforts to contain debt hurt activity, while a slowing property market also clouded the outlook for steel demand.
Shanghai benchmark rebar futures dropped as much as 1.7 percent to their lowest since July 12 before closing down 0.5 percent at 3,941 yuan ($590.03) a tonne.
“The mediocre macro-economic data added to poor market sentiment and weighed on steel prices for far-month contracts,” analysts at CITIC Futures said in a note in Mandarin, adding that prices for nearer months would be supported by declining inventories and firm physical prices.
Spot steel prices eased 0.1 percent to 4,346.37 yuan a tonne on Monday, data from Mysteel consultancy showed.
On Monday, China’s statistics bureau reported record daily crude steel output of 2.67 million tonnes in June as producers rushed to cash in on hefty margins despite stepped up environmental curbs.
“Chinese steel margins have pulled back slightly from decade-highs reached in June, but remain anchored well above historical averages,” brokerage Jefferies said in a note.
“With aggressive environmental controls likely to drive steel output restrictions, Chinese prices may soon be boosted by a further production drop.”
Steelmaking raw materials, on the other hand, bounced back from their losses from Monday’s session.
Dalian coking coal for September delivery closed up 1.1 percent at 1,148 yuan a tonne, while coke futures finished up 0.2 percent at 2,012 yuan a tonne.
The most-active September iron ore futures contract edged up 0.1 percent to close on 465 yuan a tonne.
Brazil’s Vale on Monday reported second-quarter iron ore and pellet production that was a record for an April-to-June period.
Rio Tinto said on Tuesday that its second-quarter iron ore shipments totaled 88.5 million tonnes, compared with 77.7 million tonnes a year ago and expected iron ore shipments for the year to be at the upper end of its guided range of 330 million to 340 million tonnes.
Reporting by Muyu Xu and Tom Daly; Editing by Joseph Radford and Sunil Nair