* Tangshan mills failing standards face suspension, fines
* Mills also asked to curb output ahead of Beijing summit
* Shanghai rebar rises for third day
By Manolo Serapio Jr
MANILA, May 10 Shanghai steel futures rose for a
third straight day on Wednesday, supported by worries over
tighter supply after China's leading steel-producing city
launched a fresh campaign to improve air quality.
Tangshan in northern Hebei province said steel mills that
fail to meet emission standards face suspension and heavy fines.
The campaign runs from May 9 to 31.
The most-active rebar on the Shanghai Futures Exchange
closed up 2.5 percent at 3,077 yuan ($446) a tonne.
Tangshan, home to dozens of steelmakers, is located in
heavily polluted Hebei province, China's biggest steelmaking
region. Hebei produced 192.6 million tonnes of steel last year,
nearly a quarter of the national total.
Tangshan accounted for close to half of that, with output at
88.3 million tonnes, and has been the target of a tough new
inspection campaign aimed at rooting out firms that break the
Traders say mills in Hebei were also asked to reduce or
suspend production before the One Belt One Road summit in
Beijing on May 14-15 to help clear China's skies.
The fresh curbs "will help rein in steel production and
rebalance the steel market, helping stabilise steel prices and
speed up inventory drawdown," Argonaut Securities analyst Helen
Lau said in a note.
Along with steel, iron ore futures also rose, rebounding
after recent losses.
Iron ore on the Dalian Commodity Exchange closed
2.6 percent higher at 474.50 yuan per tonne. The contract fell
to a four-month low of 456.50 yuan on May 5.
The recovery should help stabilise spot iron ore prices
which dropped to their lowest in nearly seven months this week.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
rose 1 percent to $60.75 a tonne on Tuesday, according to Metal
But ANZ analysts say the crackdown on Chinese steel mills
should reduce demand for iron ore, pointing to lower prices
"Concerns remain that a combination of a crackdown on
leverage, together with high stocks and seasonally weak demand,
will drive further weakness in prices in the near term," they
wrote in a note.
($1 = 6.9045 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Richard Pullin and