* Beijing signals fresh crackdown on excess
* Steel rise gives iron ore small boost
* Worries about high inventories linger
BEIJING, March 28 Chinese steel rebar prices
rose on Tuesday, snapping a week-long rout, as renewed optimism
about capacity cuts in the world's top steel producer offset
lingering worries about high inventory levels and waning demand
The gains helped give ore prices a brief lift on Tuesday,
after its worst day in months the previous session.
Recovering from a six-week low hit on Monday, the
most-active rebar contract on the Shanghai Futures Exchange
was up 0.98 percent at 3,091 yuan ($449.14) a tonne at
The small rise came as Beijing signalled a renewed push to
crack down on excess capacity, calling a meeting on Monday with
steel producers to discuss steps to tackle zombie firms and ban
The northeastern province of Liaoning has promised to close
more than 10 million tonnes of low-grade steel capacity by the
end of June this year.
In Hebei, the country's major producing region, authorities
launched a new probe into overproduction amid concerns mills
have boosted output, despite mandatory capacity cuts as part of
its war on smog.
Earlier this month, Beijing said it would get rid of another
50 million tonnes of steel capacity this year.
Futures on the Dalian Commodity Exchange were
unchanged at 557.5 yuan ($81.01) per tonne, after early
tentative gains ran out of steam. Prices hit an intraday high of
560 yuan earlier in the day.
Renewed scrutiny on excess steel ignited worries about
demand for raw materials like iron ore, analysts said. On
Monday, prices touched 541 yuan, their weakest since Feb. 8.
High inventories and the renewed clampdown on steel were
"enough to make a bearish call on iron ore," said Helen Lau,
analyst at Argonaut Securities.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
fell 4.1 percent to $81.57 a tonne on Monday, its weakest since
Feb. 6, according to Metal Bulletin.
Still, Lau said low steel mill inventories and high freight
rates for imported iron ore suggest market conditions may be
healthier than the port inventories would indicate.
Weekly data last week showed stockpiles at major ports in
China, the world's top steelmaker, rose for a second week,
topping 132 million tonnes last week, the highest since at least
2004, according to SteelHome consultancy. SH-TOT-IRONINV
Concerns about demand from the building sector linger after
Beijing imposed fresh curbs on lending in real estate in China
($1 = 6.8820 Chinese yuan renminbi)
(Reporting by Josephine Mason; Editing by Randy Fabi)