* Dalian iron ore hits record high of 664 yuan a tonne
* BHP sees iron ore output down by 6-8 mln T after cyclone
* Vale fails to obtain stability certificates for 13 dams
* China’s top 2 steelmaking cities to extend output curbs
By Enrico Dela Cruz
MANILA, April 2 (Reuters) - China’s iron ore futures jumped to a fresh record on Tuesday following more news that supported a tight supply outlook, with BHP saying it expects lower output of the steelmaking raw material due to disruption and damage caused by a cyclone.
BHP Group Ltd, the world’s biggest miner, said initial estimates indicated its iron ore production would take a hit of about 6-8 million tonnes after cyclone Veronica affected its operations last week.
BHP’s production guidance followed news that Brazilian miner Vale SA, the world’s top iron ore supplier, failed to obtain stability certificates for 13 dams under review following the rupture of another dam in January that killed hundreds.
The May 2019 iron ore contract, the most traded iron on the Dalian Commodity Exchange, rose as much as 4 percent in early trade to 664 yuan ($98.86) a tonne, the loftiest since China launched iron ore futures in 2013.
The price rally still has room to run, with Chinese demand for iron ore expected to rise later this month and provide further support, INTL FCStone commodity consultant Edward Meir said.
“We think prices will retain a firm tone...as we think Chinese steel mill activity should start to pick up, especially towards month-end,” he said.
Rio Tinto, the world’s No. 2 miner of the steelmaking material, on Monday cut its 2019 outlook for iron ore shipments from Australia’s Pilbara region due to production disruption and damage caused by tropical cyclone Veronica.
Last week, Vale said it would likely sell up to 75 million tonnes less iron ore this year, after several mines were halted following its second deadly dam burst in less than four years.
Other steelmaking ingredients were also firmer with coking coal up 0.6 percent at 1,249 yuan a tonne while coke rose 1.4 percent to 2,026.5 yuan.
Steel prices rose after Reuters reported late on Monday that steel mills in the two biggest steelmaking cities in China - Tangshan and Handan - will be required to continue production restrictions in the second quarter to improve air quality.
The most-active rebar contract on the Shanghai Futures Exchange climbed as much as 1.5 percent to 3,834 yuan a tonne, while hot rolled coil edged up 0.7 percent to 3,776 yuan.
Mills in the two cities will have to cut back the operations at about 20 percent of their blast furnaces under the restrictions for the April to June period, down from 30 percent for the restrictions during the November to March period, according to the five sources who spoke to Reuters on Friday and Saturday.
($1 = 6.7163 Chinese yuan)
Reporting by Enrico dela Cruz; Editing by Rashmi Aich