* China’s Aug industrial output growth grinds to 17-1/2 year low
* “Very difficult” for China to grow 6% or faster -Premier Li
* Dalian iron ore jumps more than 3% to highest since Aug. 7 (Updates with additional comment, closing prices)
By Enrico Dela Cruz
MANILA, Sept 16 (Reuters) - Chinese steel futures hit 1-1/2-month highs on Monday as investors hoped that Beijing would roll out more stimulus measures after latest economic indicators showed deepening slowdown in the world’s second-largest economy.
The most-active construction steel rebar contract on the Shanghai Futures Exchange rose as much as 2.1% to 3,575 yuan ($505.71) a tonne, its highest since Aug. 1. It closed up 1.8% at 3,564 yuan.
Hot-rolled coil, the steel used in cars and home appliances, jumped as much as 1.7% to a 1-1/2-month peak of 3,581 yuan a tonne, before closing 1.2% firmer at 3,564 yuan.
China’s industrial production grew at the weakest pace in 17-1/2 years in August, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand.
Monday’s data followed downbeat remarks by Chinese Premier Li Keqiang, saying it is “very difficult” for the domestic economy to grow at 6% rate or more because of the high base from which it was starting and the complicated international backdrop.
The dismal industrial output figures raised the likelihood of further stimulus from Beijing, which could boost demand for construction and manufacturing materials, said Helen Lau, metals and mining analyst at Argonaut Securities in Hong Kong.
Monday’s weak data print “falls short of expectations, and signals that China’s domestic consumption is not yet ready to be the key economic growth engine,” ANZ Research said in a note.
Possible tighter steel output restrictions in China ahead of the nation’s National Day holidays next month and during the winter season later this year are also providing further support to prices, Lau said.
Beijing is desperate to minimise pollution across northern parts of the country and keep the Chinese capital safer before celebrations of its 70th anniversary on Oct. 1.
Surging oil prices may put further pressure on China and the global economy. Oil futures hit six-month highs on Monday after weekend attacks on Saudi Arabia’s crude facilities knocked out more than 5% of global oil supply.
* China’s monthly crude steel output picked up in August, after falling for two straight months, official data showed on Monday, as mills boosted output ahead of production cuts expected to kick in by October as part of Beijing’s anti-pollution drive.
* Most steelmaking raw materials advanced on Monday, with the most-traded iron ore on the Dalian Commodity Exchange , for delivery in January 2020, rising as much as 3.4% to 690 yuan a tonne, its highest since Aug. 7. It ended up 0.5% at 670.50 yuan.
* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 settled at $95.50 a tonne on Sept. 12, before a three-day weekend in China due to Friday’s Mid-Autumn Festival. That level was its highest since Aug. 6, according to data tracked by SteelHome consultancy.
* Coke futures advanced as much as 2.2% to 2,025 yuan a tonne on Monday, their firmest since Aug. 14. But it also pared early gains to settle 0.6% higher at 1,994 yuan. Coking coal edged up 0.2% to 1,357.50 yuan.
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($1 = 7.0692 yuan)
Reporting by Enrico dela Cruz; Editing by Aditya Soni