* Talk of mills in Hebei, Tianjin may cut output for 20 days
* Shanghai rebar hits 2-1/2-week peak, iron ore off highs
* BHP cuts full-year iron ore production guidance
By Manolo Serapio Jr
MANILA, April 26 China's steel futures climbed
to their highest in 2-1/2 weeks on Wednesday amid unconfirmed
market talk of production curbs in cities surrounding Beijing
ahead of the New Silk Road summit in May.
China typically orders industrial plants to cut or limit
production to help clear the skies ahead of a major event such
as when it hosted the G20 Summit in Hangzhou last year.
While there was discussion in the market of unconfirmed
plans by the city of Tianjin and Hebei province, a top steel
producing region near Beijing, to curb output around the mid-May
summit, analyst Richard Lu at CRU consultancy in Beijing said he
had not yet heard of an official order from the local
"There might be restocking demand before and after the event
and also the Labor Day holiday which would be positive for rebar
prices," said Lu. Chinese markets will be shut on May 1 for the
Labor Day holiday.
The most-active rebar on the Shanghai Futures Exchange
closed up 1.3 percent at 2,967 yuan ($431) a tonne.
Earlier in the session, the construction steel product hit 3,032
yuan, its loftiest since April 10.
Based on their 2016 output, a 20-day stoppage of steel mills
in Hebei and Tianjin may cut their combined crude steel
production by 11.5 million tonnes, said Lu.
"However, this may not be the case if only sinter plants and
independent re-rollers are requested to close rather than blast
furnaces," he said.
The strength in steel prices pulled up iron ore, but the raw
material ended only slightly higher after rising as much as 3.7
percent. The most-active iron ore on the Dalian Commodity
Exchange closed up 0.2 percent at 496.50 yuan per
Firmer futures could help spot iron ore prices recover some
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
eased 0.7 percent to $66.07 a tonne on Tuesday, slipping for a
second straight day, according to Metal Bulletin.
BHP Billiton trimmed its full-year
production guidance for iron ore to between 268 million and 272
million tonnes and for coking coal to between 39 million and 41
The miner said shipments of Australian coking coal to Asian
steel mills will be affected in the current quarter after a
cyclone swept across eastern Australia in late March. Aurizon
Holdings said it had restarted its main Goonyella coal
haulage line on a limited basis after Cyclone Debbie brought the
line to a halt.
Coking coal on Dalian slipped 0.7 percent to 1,080
yuan a tonne.
($1 = 6.8878 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Christian
Schmollinger and Sherry Jacob-Phillips)