* Shanghai rebar rises the most in four months
* Underlying steel demand in China remains healthy -Argonaut
(Adds IRC considering mine restart, updates prices)
By Manolo Serapio Jr
MANILA, May 17 Iron ore futures in China jumped
nearly 5 percent on Wednesday, tracking a similar spike in steel
prices, with declining steel inventories indicating firm demand
as Beijing sustains a campaign to curb excess supply.
The most-traded iron ore contract on the Dalian Commodity
Exchange closed up 4.6 percent at 477.50 yuan ($69) a
tonne, recovering further from Monday's four-month low.
Rebar on the Shanghai Futures Exchange rose 4.3
percent to end at 3,110 yuan per tonne, its biggest single-day
increase since Jan. 10.
Inventory of steel products held by Chinese traders had
fallen 17 percent this year to 11.2 million tonnes as of May 12,
said Argonaut Securities analyst Helen Lau.
"Therefore, the underlying real steel demand remains
healthy," Lau wrote in a note.
Along with China's efforts to tackle a glut, analysts said
demand was expected to improve, especially for long steel
products for construction.
China said on Monday that 31.7 million tonnes of steel
capacity had closed so far this year, 63 percent of the target
for 2017. That comes on top of Beijing's earlier pledge to shut
all producers of low-quality steel products by the end of June
as it fights pollution.
Still, China produced a record 72.78 million tonnes of crude
steel in April.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
rose 0.6 percent to $61.17 a tonne on Tuesday, according to
Meanwhile, Hong Kong-listed IRC Ltd said it was
considering restarting its 1.1-million tonnes per year iron ore
mine in the far east of Russia, the latest sign of revival in a
sector shaking a years-long downturn.
($1 = 6.8886 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Miral Fahmy and