* China steel output grows at fastest pace since June 2014
* China industrial output, retail sales grow more than
* Shanghai rebar, Dalian iron ore near multi-year highs
By Manolo Serapio Jr
MANILA, Dec 13 Chinese rebar futures rose 2
percent on Tuesday to trade near a 32-month high, sustaining
recent strong gains that spurred output from the world's top
steel producer to increase 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
closed up 2 percent at 3,505 yuan ($508) a tonne. The
construction steel product rose to its highest since April 2014
on Monday, hitting 3,557 yuan.
Rising prices of raw materials have enabled steel mills to
increase their prices and pass on the cost to end-users, said
Richard Lu, analyst at CRU consultancy in Beijing.
"Because of the strong market sentiment, physical traders
are buying steel in hopes of making money with the price
continuing to increase," he said.
The spike in steel production last month showed mills tried
to keep up with rising prices, Lu added.
Shanghai rebar futures have surged 96 percent this year.
"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 Lu.
Also, supporting the 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.
Tracking the strength in steel, iron ore on the Dalian
Commodity Exchange closed 1.7 percent higher at 645.50
yuan a tonne.
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 = 6.9004 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Christian
Schmollinger and Vyas Mohan)