* Short-lived impact from China steel output cuts -Morgan
* Spot iron ore pulls back from 30-month high
By Manolo Serapio Jr
MANILA, Feb 16 Chinese iron ore and steel
futures stabilised on Thursday after recent sharp gains that
pushed the steelmaking raw material to a record high.
Expectations of a pickup in construction activity and steel
supply tightening in China, the world's largest producer, have
helped steel prices rally this year, fueling a rapid rise in
iron ore markets.
The most-active rebar on the Shanghai Futures Exchange
was up 0.6 percent at 3,432 yuan ($501) a tonne by 0303
GMT. The construction steel product reached a two-month high of
3,458 yuan on Wednesday.
Iron ore on the Dalian Commodity Exchange was flat
at 703 yuan per tonne, after peaking at 718 yuan in the prior
session, matching its highest intraday level touched in October
2013, when the exchange launched iron ore futures.
Rebar has gained 18 percent so far this year and iron ore
has risen 27 percent.
To improve air quality during the annual meeting of the
National People's Congress in early March, governments in
Beijing, Tianjin and Hebei have released orders for steel mills
to cap production from late February to early March, Chinese
commodities firm Xiben New Line reported.
The Beijing-Tianjin-Hebei region produced around 210 million
tonnes of crude steel last year, or 26 percent of China's total
output, analysts at Morgan Stanley said in a note.
If half of steel production in the region is capped for 20
days, the decline in production could be 5.8 million tonnes,
"In this case, it may create short-term supply tightness and
hence price reactions, as demand recovers starting from late
February," they said.
"(But) overall, we expect the potential impact to be
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
dropped 0.7 percent to $91.05 a tonne on Wednesday, according to
It was the second straight day of decline for the spot
benchmark after touching a 30-month peak of $92.23 on Monday.
($1 = 6.8577 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)