* Shanghai rebar, Dalian iron ore rise for third day
* Iron ore stocks at China's ports highest since at least
By Manolo Serapio Jr
MANILA, Jan 11 Steel and iron ore futures in
China advanced for a third session on Wednesday, hitting their
strongest in three weeks amid sustained efforts by Beijing to
tackle excess steel production capacity.
The drive since last year by the world's largest steel
producer to reduce surplus capacity has helped Chinese steel
prices snap a six-year losing streak, and they began 2017 higher
Iron ore has piggybacked on steel's rally, although traders
say plentiful stocks of the raw material at China's ports
suggest lean demand.
Apart from shutting outdated capacities, China will also
eliminate by June 30 all production of substandard rebar steel,
according to local Chinese media reports.
"(Beijing has) elevated the policy to the equivalent of
political mission," said Argonaut Securities analyst Helen Lau.
"In other words, if local government officials don't abide
by this measure, they will risk losing their jobs," Lau said in
The most-active rebar on the Shanghai Futures Exchange
was up 2.2 percent at 3,164 yuan ($457) a tonne by the
midday break, after touching a three-week peak of 3,202 yuan.
Annual production of substandard rebar, or construction
steel, in China was around 40-50 million tonnes. The closure of
these producers implies that China's annual rebar output will be
reduced by at least 20 percent, said Lau. China produced about
200 million tonnes of rebar in 2016.
Iron ore on the Dalian Commodity Exchange was last
up 2.8 percent at 596.50 yuan a tonne. It earlier touched 602.50
yuan, the highest since Dec. 16.
Iron ore is "not driven by fundamentals," said a
Shanghai-based trader, citing ample supply of the raw material
Stocks of imported iron ore at major Chinese ports reached
116.7 million tonnes on Jan. 6, according to SteelHome
consultancy, the most since SteelHome began tracking it in 2004.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
climbed 2.2 percent to $79.43 a tonne on Tuesday, according to
($1 = 6.9244 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)