* Shanghai rebar off session highs, Dalian iron ore erases
* Spot iron ore stays above $80/tonne
By Manolo Serapio Jr
MANILA, March 30 Shanghai rebar steel futures
rose for a third straight session on Thursday, supported by
China's campaign to eliminate surplus capacity, although
concerns over tepid seasonal demand capped their upside.
The gains initially helped iron ore recover further from an
early-week slide that pulled down futures to their weakest in
more than two months and spot prices to their lowest in seven
But iron ore futures erased gains in afternoon trading and
rebar came off the day's peaks, suggesting still shaky investor
The most-active rebar on the Shanghai Futures Exchange
closed up 0.6 percent at 3,142 yuan ($456) a tonne,
after earlier peaking at 3,189 yuan. The construction steel
product touched 3,003 yuan on Monday, its weakest since Feb. 10.
"China's ongoing efforts in reducing outdated capacity,
constraining steel production and regulating pollutant emissions
will tighten the steel market, supporting steel prices going
forward," Argonaut Securities analyst Helen Lau said in a note.
China's Hebei province, a major steel-producing area, has
launched a fresh probe into steel overproduction in the city of
Tangshan amid concerns that firms have continued to raise output
despite mandatory capacity cuts.
The northeastern Chinese province of Liaoning has promised
to close more than 10 million tonnes of low-grade steel capacity
by the end of June as part of its efforts to clean up the
sector, the official Liaoning Daily reported on Tuesday.
Iron ore for September delivery on the Dalian Commodity
Exchange closed 0.5 percent lower at 559 yuan per
tonne, after rising as far as 581.50 yuan. The contract on
Monday touched its lowest since Jan. 10 at 541 yuan.
The towering stocks of imported iron ore at China's ports
which underline slow demand for the steelmaking raw material has
put prices under pressure.
Port inventory reached 132.45 million tonnes on March 24,
the most since at least 2004, according to SteelHome
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
edged up 0.3 percent to $82.25 a tonne on Wednesday, according
to Metal Bulletin.
($1 = 6.8889 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford and