* Iron ore prices up as much as 2.9 pct
* Steel mills seen rebuilding ore stocks
By Enrico Dela Cruz
MANILA, Jan 4 (Reuters) - Chinese steel futures edged higher on Friday, with iron ore contracts jumping to the highest in more than two months, buoyed by expectations that steel mills would replenish their stocks of the raw material.
The most-traded iron ore on the Dalian Commodity Exchange rose as much as 2.9 percent to hit 509 yuan ($74.13) a tonne in early deals, the highest since Oct. 31 when it had hit 511 yuan.
“Our data analytics model shows low iron ore inventory at steel mills’ warehouses. So, they are looking to replenish,” said Darren Toh, a data scientist with Singapore-based steel and iron ore data analytics company Tivlon Technologies.
“We are seeing more relaxation in using iron ore in Q1 2019,” he said, with the government’s anti-pollution restrictions that prompted steel mills to cut output or halt operations in recent weeks to be eased after this month.
Prices of other steel-making raw materials also rose, with coking coal up 0.8 percent at 1,172 yuan a tonne and coke higher by 0.4 percent at 1,919 yuan by 0255 GMT.
Steel prices edged up, with the most-active rebar contract on the Shanghai Futures Exchange climbing 0.7 percent to 3,444 yuan a tonne. Hot rolled coil was up 0.4 percent at 3,338 yuan.
Still, analysts believe any gains at this stage may not be sustainable amid concerns about China’s economic growth.
China, the world’s second-largest economy, likely expanded at more than 6 percent last year, reflecting a slowdown from years past. The slowdown may persist this year with the Sino-U.S. trade war raging on.
Spot iron ore for delivery to China SH-CCN-IRNOR62 rose 0.6 percent to $73 a tonne on Thursday, according to SteelHome consultancy.
$1 = 6.8665 yuan Reporting by Enrico dela Cruz; Editing by Shreejay Sinha