* Shanghai rebar hits a three-year peak
* Planned steel output limits ahead of China’s NPC
* Iron ore stocks at China’s ports still at highest since 2004 (Updates prices)
By Manolo Serapio Jr
MANILA, Feb 27 (Reuters) - Chinese steel futures jumped nearly 5 percent and iron ore also climbed on Monday as both commodities resumed their rally amid planned curbs in steel production in key areas in China and a pickup in seasonal demand.
Rebar prices pushed to a fresh three-year high and iron ore neared a record peak, both benefiting from China’s efforts to tackle a steel glut and boost infrastructure spending.
The most-active rebar on the Shanghai Futures Exchange closed up 4.7 percent at 3,612 yuan ($526) a tonne. Earlier in the session, it hit 3,648 yuan, its strongest since Feb. 21, 2014. The construction steel product has gained about 23 percent this year.
Iron ore on the Dalian Commodity Exchange rose 3.2 percent to end at 714 yuan per tonne. The steel-making raw material has risen 28 percent this year, having touched a record high of 741.50 yuan last week.
Steel producers in the Hebei-Beijing-Tianjin area have been asked to shift their peak-load production to reduce pollution ahead of the start of China’s National People’s Congress on Friday, said Helen Lau, analyst at Argonaut Securities.
Steel inventory held by Chinese traders fell to 16.29 million tonnes as of Feb. 24 from 16.39 million tonnes in the prior week, the first decline since last November, due to seasonal demand recovery, she said.
“Looking ahead over short and mid-term, China’s steel market will remain tight on the back of production regulation and seasonal demand recovery. We expect to see more upside in steel prices in both spot and futures markets,” Lau said in a note.
The revival in futures could push spot iron ore prices back toward $100 a tonne, after retreating last week as some traders cast doubt on the sustainability of this year’s rally amid ample stocks of the raw material in China.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slipped 0.9 percent to $90.50 a tonne on Friday, according to Metal Bulletin. The spot benchmark hit a 30-month peak of $94.86 last Tuesday.
Stockpiles of imported iron ore at 46 major Chinese ports continued to rise, hitting 129.35 million tonnes, the highest since 2004 when SteelHome consultancy began tracking the data. SH-TOT-IRONINV ($1 = 6.8731 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Richard Pullin and Sherry Jacob-Phillips)