* Spot iron ore tops $90/T for first time since Aug 2014
* China producer price inflation hits near six-year high
By Manolo Serapio Jr
MANILA, Feb 14 China's iron ore futures rose for
a sixth session in a row on Tuesday, hitting their highest in
more than three years, amid firm steel demand in the world's top
consumer and tighter supply driven by Beijing's campaign against
As futures rallied, spot iron ore prices have similarly
surged, with the spot benchmark topping $90 a tonne for the
first time since 2014 on Monday.
"China's positive steel outlook is driven by ongoing supply
tightness and sustained demand growth," Argonaut Securities
analyst Helen Lau said in a note.
Lau said some Chinese steel mills in Hebei, Beijing and
Tianjin have received orders from local governments to suspend
steel production from the second half of February to the first
half of March.
The most-traded iron ore on the Dalian Commodity Exchange
rose as far as 716 yuan ($104) a tonne, its strongest
since October 2013, and was trading up 0.5 percent at 703.50
yuan by 0316 GMT.
On the Shanghai Futures Exchange, rebar was up 0.2
percent at 3,407 yuan a tonne. It also marked the sixth straight
day of increase for the construction steel product, which
touched 3,450 yuan earlier, near Monday's two-month peak.
Amid a torrid rally in steel prices and other raw materials,
China's producer price inflation picked up more than expected in
January to near six-year highs, adding to views that global
manufacturing activity is building momentum.
Besides regular environmental inspections conducted by
Chinese authorities that have led to mills temporarily shutting
their plants, the government plans to cut steel capacity by at
least half in 28 cities across five regions during the winter
heating season as Beijing intensifies its war on smog, a draft
policy document shows.
Along with tighter supply, steel demand is also picking up
after the Lunar New Year break and should strengthen during
spring, traders say.
Bids for physical iron ore cargoes have risen as futures
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
jumped 6.5 percent to $92.23 a tonne on Monday, the highest
since August 2014, according to Metal Bulletin.
It was the biggest percentage spike for the spot benchmark
since last December.
($1 = 6.8804 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Amrutha Gayathri)