(Updates prices)
By James Regan
SYDNEY, July 25 (Reuters) - Chinese iron ore futures broke a three-day losing streak on Tuesday, showing strong gains as investors refocused on China's robust steel sector and as some of the world's biggest suppliers struggle to meet output targets.
Hefty price gains in copper and nickel markets, closely linked to China's industrial and economic state of health, helped fuel iron ore's gains.
Australia's Fortescue Metals Group FMG.AX is expected to meet the low-end of forecast fiscal 2017 iron ore output of 165-170 million tonnes when it releases data on Thursday, due to bad weather in the second-half of the year at its mines.
That follows guidance warnings from Brazil's Vale VALE.N VALE5.SA and Australia's Rio Tinto RIO.AX RIO.L over full-year output. ore on the Dalian Commodity Exchange DCIOcv1 was up 3.43 percent at 527.5 yuan ($78.17) a tonne, more than twice the gain recorded at the start of trading.
The most active rebar on the Shanghai Futures Exchange SRBcv1 also rose nearly 2 percent to 3,570 yuan.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB climbed to $67.86 a tonne by Monday's close, according to Metal Bulletin.
China's giant steel sector churned out 72.78 million tonnes in June, equivalent to annualised production of 891 million tonnes, data last week showed. traders warned that high inventories of steel could cap steel and iron ore price gains in coming weeks if stocks fail to recede.
Stocks of rebar SH-TOT-RBARINV added 2.34 million tonnes over the last week to 372.7 million tonnes, according to SteelHome data.
London copper struck its highest level since mid-February on Tuesday after unexpected strength in China's economy and a weaker dollar fanned upside technical momentum. MET/L
Sentiment towards copper from the physical market has picked up as fabricators in China have replenished their inventories, Citi said in a report.
The copper contract on the Shanghai Futures Exchange SCFcv1 rose 1.2 percent, while ShFE nickel SNIcv1 was up more than 2.5 percent.
($1 = 6.7480 Chinese yuan)