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UPDATE 1-Shanghai rebar extends rally to one-month high, lifts iron ore

Published 16/10/2017, 06:13 pm
© Reuters.  UPDATE 1-Shanghai rebar extends rally to one-month high, lifts iron ore

* China steel production cuts in smog fight still aiding prices

* Spot iron ore had biggest one-day jump since July on Friday (Updates prices)

By Manolo Serapio Jr

MANILA, Oct 16 (Reuters) - Chinese rebar steel futures advanced for a third straight day to hit a one-month peak on Monday, supported by output cuts in the world's top producer as part of the government's battle against smog.

The gains in steel prices lifted iron ore, although traders were not convinced the increase in prices of the raw material would last when most of the steel output curbs in China are in place during winter.

The most-active rebar on the Shanghai Futures Exchange SRBcv1 surged as much as 4.3 percent to 3,878 yuan ($589) a tonne, its loftiest since Sept. 14. The construction steel product then trimmed gains to close at 3,824 yuan, up 2.9 percent.

Iron ore on the Dalian Commodity Exchange DCIOcv1 jumped 3.8 percent to end at 463 yuan per tonne, after hitting an intraday high of 470.50 yuan.

"The demand for iron ore in the near future doesn't look great and we could see it come down again maybe in two weeks time," said an iron ore trader in Shanghai.

China's iron ore imports jumped to a record 103 million tonnes in September, in what analysts say was an indication of firm demand. iron ore consumption looks at risk, traders say, as parts of China, particularly in the north, order mills to cut output as early as this month.

China's top steelmaking city of Tangshan last week became the latest to enforce production cuts this month, ahead of the previous deadline of Nov. 15, when winter heating systems in China are switched on. of iron ore at China's major ports dropped to 131.35 million tonnes as of Oct. 13 versus 133.85 million tonnes on Oct. 10, which was the highest level since late August, data from SteelHome consultancy showed. SH-TOT-IRONINV

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB climbed 4.1 percent to $62.53 a tonne on Friday, according to Metal Bulletin, marking its biggest one-day rise since July 31. ($1 = 6.5875 Chinese yuan)

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