* Iron ore rises for 4th day, hit more than three-week high
* Steel spot prices continue recovering
* Market is betting on tougher environmental curbs
SHANGHAI, July 30 (Reuters) - Chinese iron ore futures rose more than 2 percent to their highest in over three weeks on Thursday, supported by firmer steel prices in the world's top producer.
Slow demand and tougher anti-pollution measures have prompted some Chinese mills to curb production, spurring a recovery in spot prices of steel.
The most active January iron ore contract on the Dalian Commodity Exchange DCIOcv1 rose for the fourth consecutive day to hit a session high of 374.5 yuan($60.32)a tonne, its highest since July 6. It was up 1.78 percent at 372.5 yuan by 0227 GMT.
"The increase in price was supported by the speculation that steel mills are buying iron ore from ports, against the seasonal trend. Steel prices have also stabilised and firmed modestly in recent weeks - supporting sentiment in the iron ore market," ANZ said in a research note.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose for a fourth day on Wednesday, hitting $55.3 a tonne, its highest since July 2, according to the Steel Index.
"The market is betting on tougher environmental protection measures, and steel spot prices are rising, supporting iron ore, though falling steel output could hit iron ore demand," said an iron ore trader in Beijing.
In the first half of the year, China's total steel output dropped 1.3 percent from a year ago to 409.97 million tonnes, data from the statistics bureau shows. ID:nL3N0ZP3QU
Rebar prices in some cities rose 40 yuan on Wednesday, according to industry website Mysteel data. Rebar has gained an accumulated 140 yuan a tonne from a record low of 1,890 yuan on July 17, the data shows.
The most traded January rebar contract on the Shanghai Futures Exchange SRBcv1 was mostly steady at 2,100 yuan by 0227 GMT.
Rebar and iron ore prices at 0227 GMT
Contract
Last
Change Pct Change
SHFE REBAR JAN6
2100
+2.00
+0.10
DALIAN IRON ORE DCE DCIO JAN6
372.5
+6.50
+1.78
SGX IRON ORE FUTURES SEP
51.2
-0.13
-0.25
THE STEEL INDEX 62 PCT INDEX
55.3
+3.10
+5.94
METAL BULLETIN INDEX
55.89
+2.44
+4.57
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2086 Chinese yuan renminbi)