Rebar future pulled off a late charge during the afternoon session that closed RMB 4,017 a tonnes, down 0.20% or RMB 8 a tonne on Thursday.
The surge may be due to speculation of further output cuts Tangshan which might extend for another month till the end of August instead of end-July.
Further production cuts are likely to support steel prices, which places further downward pressure on iron ore demand.
DCE tumbles at closing session
After a disappointing morning session, the iron ore paper market joined the rally in rebar future before tumbling at the end of the afternoon trading session.
During the closing 30 minutes of the afternoon trading session, the DCE dived to a freefall from RMB 873 to close at RMB 866.50 a tonne at Thursday.
This was the second consecutive day drop for the DCE amid weak demand for automobile sales and soften outlook for China economy.
Poor automobile sales and slow economic growth
According to China’s biggest auto industry association, the country is likely to see further decline in car sales this year as the sector has contracted for a 12th straight toward the month of June.
Though in the month of June, there were some signs of the recovery with the rise of passenger car sales. However, the overall car sale volumes were still down by 9.3% year-in-year for the first half of 2019, based on the date from China Passenger Car Association (CPCA).
Meanwhile, China’s economic growth is slated to slow to a 30- year low around 6.2% in 2019, amid the ongoing trade dispute with the US, according to Reuters poll.
This downward growth is expected to occur despite the Chinese government’s best effort in introducing various economic stimulus programmes such as the lower of short-term interest rates and reduction of reserve requirement ratio for banks six times since last year.