DCE kicked off to a bullish start on Monday, due to positive steel output data from China.
During the afternoon session, the DCE soared up by 2.34% on-day to close at RMB 895 a tonnes, after touching a day-high at RMB 898.50 a tonnes.
Rebar contracts followed suite as well with closing at RMB 4,030 a tonne, up 0.95% on-day after a short squeeze at last ten minutes of the trading session.
China’s crude steel output rises 10% in June
The market rally was attributed by the strong crude steel production in June, where production jumped by 10% on-year to 87.53 million tonnes, based on the data from National Bureau of Statistics (NBS).
On term of monthly output, the June output volume was lesser when compared to record-high production level in May at 89 million tonnes. This was due to output cut implemented in June to improve air quality in the Hebei province, which included the steel-making hub in Tangshan.
In June, the daily average daily output of steel edged up by 1.74% to 2.92 million tonne as compared to 2.87 million tonnes recorded in May. Overall, the crude steel production in China went up by 9.9% on-year to 492.17 million tonnes during Jan-Jun period.
China GDP’s grows within expectation in June
Due to effect of heightening trade tension with the US, China’s GDP in Q2 dropped to 27 years low but still within analysts’ expectation.
During the April to June period, China’s GDP slowed to 6.2%, as compared to 6.4% growth in Q1, while the overall first six month of 2019, the country’s GDP grew by 6.3% on-year.
However, there were other positive economic indicators as well in June, with China’s industrial output rose by 6.3% on-year, while the country’s Jan-Jun property investment went up by 10.9% on-year to RMB 6.16 Trillion.
On the supply side, China’s iron ore imports fell in June by 9.7% on-year to 75.18 million tonnes due to slowing shipments for Australian and Brazilian suppliers. Port inventory then fell to a 2 ½ year low at 115.25 million tonnes by end-June which supported higher iron ore prices.