* Dalian iron ore hits limit, Singapore futures up 19 pct
* China expected to limit steel output around Tangshan
* Goldman keeps bearish view on iron ore
* Beijing aiming for 6.5-7 pct GDP growth for 2016 (Updates with spot price)
By Manolo Serapio Jr
MANILA, March 7 (Reuters) - Spot iron ore prices rocketed nearly 20 percent to the highest in more than eight months on Monday, buoyed by bullish sentiment and expectations that Chinese steel mills are planning a short-term output boost.
Iron ore futures in China jumped nearly 5 percent to hit their upside limit and Singapore futures rallied 19 percent, tracking a 5 percent rise in Shanghai steel prices, which also touched their upside limit for the day.
Goldman Sachs (NYSE:GS), however, said the iron ore rally would not last in the absence of a significant improvement in Chinese steel demand, sticking to its bearish take on one of this year's biggest commodity comebacks. city in northern China's Hebei province, the country's top steel producing region, is scheduled to host an international horticultural exposition from April 29 to Oct. 16.
Authorities are expected to order steel mills in the region to slash production to reduce air pollution during the event and producers are expected to increase output beforehand.
A draft on how the government will limit pollution during the period was released at the weekend, said Wang Di, analyst at CRU Group in Beijing.
"I also think bullish sentiment is playing a big part in pushing up prices," said Di, adding that while steel demand has improved compared with the winter period, there "hasn't been a significant change".
Chinese steel futures soared. May rebar on the Shanghai Futures Exchange SRBcv1 closed up 5 percent at its upside limit of 2,073 yuan a tonne, the highest since Aug. 17.
Strong gains in ferrous futures lifted bids for spot cargoes in the physical market. Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI jumped 19.5 percent to $62.60 a tonne, the highest since June 15, according to data compiled by The Steel Index.
On the Singapore Exchange, May iron ore SZZFK6 soared 19.3 percent to $58.95 a tonne, the highest since January last year.
The most-traded May iron ore contract on the Dalian Commodity Exchange DCIOcv1 closed 4.9 percent higher at the exchange-set ceiling of 407 yuan ($62.49) a tonne, its strongest since June 11. The contract first surged to its upside limit in night trading on Friday.
China's economy is not heading for a hard landing and is not dragging on the global economy, the country's top economic planner said on Sunday, but uncertainty and instability in the global economy do pose a risk to growth. will aim for economic growth of between 6.5 percent and 7 percent for 2016. Growth of 6.5 percent would be the slowest in China in a quarter century. Rebar and iron ore prices
Contract
Last
Change Pct Change SHFE REBAR MAY6
2073
+98.00
+4.96 DALIAN IRON ORE DCE DCIO MAY6
407
+19.00
+4.90 SGX IRON ORE FUTURES MAY
58.95
+9.55
+19.33 THE STEEL INDEX 62 PCT INDEX 62.60
+10.20
+19.50 METAL BULLETIN INDEX
51.2
+0.00
+0.00
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne ($1 = 6.5127 Chinese yuan)