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UPDATE 1-China's rebar hits 3-1/2-yr high on firm econ data

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  1. A worker cuts crude steel on a production line at a steel factory in Ganyu, Jiangsu province July 11, 2013.
    • China Q2 GDP growth at 6.9 pct year-on-year
    • Market confidence grows on better-than-expected economy outlook
    • China steel output hit record in June
    • Rebar inventory hits lowest in 7-1/2 months

    (Update prices, adjust context)

    BEIJING, July 17 (Reuters) - China's steel rebar futures rose to their highest in more than three-and-a-half years, buoyed by firm economic data in the world's top producer amid record amounts of steel output in June.

    China's economy grew 6.9 percent in the second quarter, faster than expected due to a pick up in industrial output and consumption, the National Bureau of Statistics said on Monday.

    The country's factory output grew 7.6 percent in June from a year earlier, while fixed-asset investment expanded 8.6 percent in the first half of this year, both beating forecasts.

    "The market used to hold a gloomy outlook on China's economy and expect weak demand in the property and infrastructure sectors. Now the new data proved these ideas to be wrong and helped to boost market confidence," said Bai Jing, analyst at Galaxy Futures.

    China produced a record 73.23 million tonnes of crude steel in June, surpassing previous all-time high in April, data from the National Statistics Bureau showed on Monday.

    The most-traded rebar futures SRBcv1 on the Shanghai Futures Exchange hit intraday-top at 3,668 yuan ($541.55), highest since Dec. 19, 2016, and closed 1.4 percent higher to 3,627 yuan a tonne.

    Stocks of rebar held by Chinese traders SH-TOT-RBARINV dropped 1 percent to 370.4 million tonnes on Monday, the lowest since Dec, 2016, the data from SteelHome showed.

    Spot rebar prices dropped less than 0.1 percent to 3,891.4 yuan a tonne on Friday, according to data on the website of Mysteel Consultancy.

    The most-active iron ore futures on the Dalian Commodity Exchange DCIOcv1 had risen 3.1 percent to 494.5 yuan a tonne, after hitting their highest in 8 weeks at 501 yuan a tonne.

    Stockpiles of imported iron ore at ports SH-TOT-IRONINV increased 400,000 tonnes to 139.7 million tonnes on Monday, according to data compiled by SteelHome consultancy.

    "Despite the high iron ore stocks, demand for high-quality iron ore remains firm, as mills who use blast furnaces require more high-end raw material," said Bai.

    ($1 = 6.7731 Chinese yuan renminbi)

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