* Rebar plunges 5.8 pct in early trade
* Market took cue of report for slower 2017 economic growth
(Adds closing prices)
BEIJING Dec 26 Chinese steel futures fell
sharply on Monday to the lowest level in over a month, as
traders took cues from market talk that Beijing may tolerate
slower economic growth amid rising debt and an uncertain global
Citing a source, Bloomberg on Friday reported that Chinese
president Xi Jinping told the Communist Party's financial and
economic leading group that the world's second-largest economy
could tolerate growth lower than 6.5 percent.
The most-active rebar contract for May delivery on the
Shanghai Futures Exchange fell 5.8 percent in early
trade on Monday. It closed 3 percent down at 2,927 yuan
($421.19) a tonne, the lowest level since Nov.22.
"The government re-emphasized keeping the real estate market
at a steady and healthy pace of development. The market didn't
take it as a signal of curbing property prices until the central
government implied that the country will tolerate a GDP below
6.5 percent," said Bai Yilin, steel analyst at Sinosteel
The prospect of slower economic growth added to worries
about already high inventories of the construction steel which
has grown for five weeks in a row, traders said.
The construction steel touched a 32-month peak last week and
has gained more than 60 percent so far this year, spurred by
Beijing's campaign to slim its bloated steel sector and efforts
to stimulate its economy.
Iron ore on the Dalian Commodity Exchange slipped
to 545.5 yuan a tonne, the lowest in more than a month. But it
has still surged 170 percent this year, touching a nearly
three-year high last week.
The market will also be keenly following a new law passed in
China on Sunday that will levy specific environmental protection
taxes on industry for the first time from 2018, as part of a
renewed focus on fighting pollution.
The new tax levy was expected to increase the cost of steel
production and eliminate unqualified small mills, but its real
impact may depend on its implementation, said Sinosteel Futures'
($1 = 6.9493 Chinese yuan)
(Reporting by Xu Muyu and Meng Meng, Writing by Chen Aizhu;
Editing by Subhranshu Sahu)