* Speculative investors riding upbeat sentiment
* Shanghai rebar hits one-month high
By Manolo Serapio Jr
MANILA, Jan 16 (Reuters) - Iron ore futures in China soared as much as 8 percent to a three-year peak on Monday, lifted by strong gains in steel prices that continued to benefit from Beijing's campaign to slash excess capacity.
The sharp price increases in steel and iron ore, as well as other raw materials coking coal and coke, suggest speculative investors took advantage of upbeat sentiment for the sector to raise bets in these commodities as they did last year.
The most-active iron ore on the Dalian Commodity Exchange DCIOcv1 hit the exchange-set ceiling of 657.50 yuan ($95) a tonne, its strongest since January 2014, and was up 6.7 percent at 650 yuan by midday.
Construction steel product rebar on the Shanghai Futures Exchange SRBcv1 was last up 5 percent at 3,368 yuan per tonne after earlier touching a one-month peak of 3,418 yuan.
Both steel and iron ore posted their best week since November last week after China said it would shut down production of low-grade steel products by end-June, its boldest effort yet to tackle overcapacity and pollution. has been an improvement in sentiment since last week and I think there are more speculative" forces at play, said Wang Di, analyst at CRU consultancy in Beijing.
Iron ore and steel futures are among the most heavily traded commodities in Chinese markets and saw wild swings last year that forced China's exchanges to impose higher transaction fees and other measures to stem speculative activity. steel supply which is likely to tighten as China addresses its capacity glut, there are plentiful stocks of imported iron ore at the country's ports.
Iron ore inventory at the ports stood at 118.15 million tonnes on Friday, the most since 2004, according to data tracked by SteelHome. China's imports of the raw material topped 1 billion tonnes last year for the first time ever. a crazy market. There's no reason to explain this move," said a Singapore-based trader on Monday's spike in the futures market, citing "poor" iron ore fundamentals that should be capping gains.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.6 percent to $80.54 a tonne on Friday, a day after touching a near one-month high, according to Metal Bulletin.
Coal futures also rose on Monday, with coking coal DJMcv1 up 3.9 percent and coke DCJcv1 advancing 6 percent.
($1 = 6.8935 Chinese yuan)