* Steel on track for first weekly loss since mid-July
* Iron ore up almost 4 pct for biggest daily gain since
By Josephine Mason
BEIJING, Sept 2 Chinese iron ore and steel
futures rallied on Friday, breaking a six-day losing streak
after hitting one-month lows in the previous session, amid hopes
of stronger demand for the metal and its feedstock after the G20
Iron ore rose almost 4 percent before easing off highs to
close up 1.3 percent for its best daily gain in almost a month
due to expectations that mills shuttered for the world meeting
in China will resume operations late next week, boosting buying
of their key raw material.
Prices were still down 2.8 percent on the week, their
largest fall since mid-July, pressured by closures of steel
mills around the eastern city of Hangzhou to improve air quality
ahead of this weekend's G20 summit.
Analysts said steel prices rallied on Friday as China, the
world's biggest steel producer accounting for half of global
output, was seen ramping up efforts to close old, inefficient
furnaces this year.
The closure of mills around Hangzhou as the government has
tried to spruce up the host city for the G20 summit has added
further momentum to the gains.
"I think China will speed up consolidation in the steel
sector. We will eventually see some rebalancing and this will be
good for steel," said analyst Helen Lau of Argonaut Securities
in Hong Kong.
The most-active January iron ore on the Dalian Commodity
Exchange settled up 1.3 percent at 419.5 yuan
($62.81) a tonne, after rising to as high as 432 yuan earlier in
the session, its highest since Aug. 26.
On the Shanghai Futures Exchange, construction steel product
rebar rose 0.75 percent to close at 2,406 yuan a tonne.
It was down 4.5 percent for the week.
Prices were also boosted by China's better-than-expected
manufacturing data on Thursday, Lau said.
The market is eyeing a key U.S. jobs report later in the
session that could dictate short-term direction in metals
The seasonal peak period for Chinese steel demand in
September and October along with a mending economy could spur a
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI
was down 60 cents at $58.4 a tonne on Thursday, according to The
Steel Index (TSI).
But ANZ analysts cautioned they expect iron ore prices to
continue to track volatile steel prices, keeping them in a range
between $50 and $60, as mills ramp up output, which is likely to
drag metals prices lower.
($1 = 6.6794 Chinese yuan)
(Reporting by Josephine Mason; Editing by Joseph Radford and