* Rebar and iron ore among most-traded, hit 2-month highs
* Cotton surges 5 pct to highest since May 2014
* Expectations of stimulus after weak PMI
By Manolo Serapio Jr
MANILA, July 4 (Reuters) - Chinese commodities from nickel to cotton surged on Monday on hopes Beijing will unleash more stimulus to prop up a sluggish economy, brightening the outlook for raw material demand.
An official survey on Friday pointed to China's weak manufacturing sector in June with export orders and inventories falling and factories shedding more workers. are headwinds in the domestic market and exports and for the government to achieve its macroeconomic targets they need to focus on more stimulus in the second half of the year," said Helen Lau, an analyst at Argonaut Securities in Hong Kong.
"That will be good for commodity demand."
Chinese commodities have mostly outperformed stocks this year as investors see more upside potential after a glut in supply had hit the sector hard.
A rally in commodities in April caused prices and volumes to soar and forced exchanges to step in to curb speculative activity. gains also reflect sustained recovery in risk appetite among Chinese investors as the fallout from the British vote to exit the European Union eases.
Rebar and iron ore, which hit the highest in two months, were among the most-traded commodity futures, .
Rebar on the Shanghai Futures Exchange SRBcv1 rose as much as 5.3 percent to 2,468 yuan ($370) a tonne and iron ore on the Dalian Commodity Exchange DCIOcv1 advanced as much as 4.9 percent to 441.50 yuan per tonne.
Both extended last week's gains that were spurred by low steel inventory levels and efforts by Beijing to consolidate its steel sector.
"The tight supply and expectation of more fiscal stimulus by the government to shore up the economy may continue to boost sentiment in both spot and futures market," said Lau.
Among other commodities, the most-traded cotton contract on the Zhengzhou Commodity Exchange CCFcv1 rose by its maximum allowed 5 percent to hit the highest since May 2014.
Shanghai nickel SNIcv1 surged by its 6 percent upside limit to the strongest since November and tin SSNcv1 jumped as much as 7.5 percent to the highest since last May.
Nickel was supported by worries about mine closures in the Philippines as the country's new mining minister announced plans to review all mines in the country, the biggest supplier of nickel ore to China. strong performers include Dalian soyoil DBYcv1 and Shanghai silver SAGcv1 , which advanced by their 4 percent and 6 percent upside limit, respectively. Shanghai rubber SNRcv1 rose nearly 6 percent. ($1 = 6.6616 Chinese yuan)