* Gains spurred by China's drive to tackle steel
* Shanghai rebar, Dalian iron ore near multi-week highs
* China 2016 iron ore imports hit record 1.024 bln T
By Manolo Serapio Jr
MANILA, Jan 13 Chinese steel and iron ore
futures held firm near multi-week highs on Friday and were on
track for their best week since November amid Beijing's resolve
to trim down its bloated steel sector.
The most-active rebar on the Shanghai Futures Exchange
eased 0.2 percent at 3,205 yuan ($464) a tonne by 0301
GMT. It hit an intraday peak of 3,247 yuan, near Thursday's
The construction steel product has gained almost 9 percent
so far this week, the most since late November.
The main driver this week was China's move to shut
production of low-grade steel products by the end of June, as it
tackles both overcapacity and chronic smog.
The crackdown, targeting small mills that run
highly-polluting furnaces, will affect about 4 percent of the
country's steel output.
Chinese authorities have dispatched 12 inspection groups to
some areas including top steelmaking province Hebei, as well as
Henan, Guangxi and Heilongjiang, to oversee the move.
Iron ore on the Dalian Commodity Exchange was up
0.4 percent at 608.50 yuan per tonne after touching a four-week
high of 619 yuan earlier in the session. It has risen nearly 12
percent this week.
Demand for the steelmaking raw material has been quite
stable, traders said, with Chinese mills still favouring
high-grade material to cope with costly coal prices.
"Steel mills' profits are still OK so they would like to use
better grade material," said a trader in Beijing. "Mills also
need to buy some stocks to prepare for the long Spring Festival
Chinese markets will be shut for a week for Lunar New Year
break from late January.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
rose 0.7 percent to $80.99 a tonne on Thursday, according to
Metal Bulletin. It was the highest for the spot benchmark since
Dec. 19, bringing its weekly gain so far to 6.2 percent, also
the biggest since late November.
"Iron ore prices will remain elevated in the coming months
as speculative activity from positive investor sentiment on the
Chinese infrastructure sector rolls on," BMI Research said in a
"However, impulsive increases in production due to the price
rebound, by junior miners, especially those in Australia, could
further flood the oversupplied seaborne market, pushing prices
even lower in the second half of 2017."
China's iron ore imports rose 7.5 percent to a record 1.024
billion tonnes in 2016, customs data showed.
($1 = 6.9006 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Randy Fabi)