* China’s Q2 GDP drops from previous quarter
* Slowing property sector also clouds outlook for steel
* But further output curbs set to support steel prices -Jefferies
* Vale, Rio Tinto output up in Q2
BEIJING, July 17 (Reuters) - China’s construction steel rebar prices fell for a second session 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 had dropped 0.9 percent to 3,925 yuan ($588.01) a tonne by 0216 GMT.
“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 generally recovered from losses in the previous trading session.
Dalian coking coal for September delivery edged up 0.4 percent to 1,139.5 yuan a tonne on Tuesday. Coke futures dipped 0.6 percent to 1,996 yuan a tonne.
The most-active iron ore futures were little changed in early trade at 464.5 yuan.
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 shipment totalled 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 range of 330 million to 340 million tonnes.
$1 = 6.6751 Chinese yuan renminbi Reporting by Muyu Xu and Josephine Mason Editing by Joseph Radford