* China steel output grows at fastest pace since June 2014
* China industrial output, retail sales grow more than
* Dalian iron ore slips after hitting near 3-year peak on
By Manolo Serapio Jr
MANILA, Dec 13 Chinese rebar futures edged
higher on Tuesday but came off session highs after data showed
that output from the world's top steel producer increased at the
fastest clip in more than two years last month.
China's crude steel production rose 5 percent to 66.29
million tonnes year-on-year in November, the fastest growth
since June 2014.
It marked the ninth straight month of increases in steel
output and suggested that Beijing's efforts to tackle a glut by
shutting excess capacity has not stopped mills from producing
more to chase rising prices.
The most-active rebar on the Shanghai Futures Exchange
was up 0.7 percent at 3,461 yuan ($502) a tonne by
midday, but off the session's high of 3,500 yuan.
"For this year most of the capacities that have been cut or
closed are non-operating capacity. Some of them have been idle
for years so it won't largely impact steel output," said Richard
Lu, analyst at CRU consultancy in Beijing.
Lu said the spike in steel production last month showed
mills tried to keep up with rising prices. Shanghai rebar
futures have surged 94 percent this year.
Rising prices of raw materials have enabled steel mills to
increase their prices and pass on the cost to end-users, said
"Because of the strong market sentiment, physical traders
are buying steel in hopes of making money with the price
continuing to increase," he said.
Also supporting sentiment on Tuesday was upbeat Chinese data
with industrial output and retail sales both growing above
expectations in November.
"We will perhaps see a production decline in December. As
per our record there will be some scheduled maintenance at some
very large steel mills," said Lu.
Iron ore on the Dalian Commodity Exchange was off
0.4 percent at 632 yuan a tonne, after rising as far as 643.50
The Dalian contract surged to a nearly three-year high of
657 yuan on Monday, lifting bids in the physical market and
pushing the spot iron ore price further above $80 a tonne.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
jumped 2.4 percent to $83.58 a tonne, its strongest since
October 2014, according to Metal Bulletin.
($1 = 6.9007 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Christian