* Tangshan halves output at steel mills from Oct. 11-18
* Steel products inventory down this week
* Mills outside Tangshan ramp up production (Updates closing prices)
BEIJING, Oct 12 (Reuters) - Prices of steel rebar rose on Friday, posting the best week since mid-August as tougher production restrictions in the country’s top steelmaking hub raised concerns about short supplies.
Tangshan city on Thursday ordered mills to cut output by half from Oct. 11-18 due to forecasts of adverse weather, according to a city government document.
The emergency measures would add to the impact of winter output restrictions in place since Oct.1 that ordered steel mills to carry out flexible cuts based on their emission levels.
The most-active rebar contract for January delivery closed 2.1 percent higher at 4,106 yuan ($593.96) a tonne.
Hot-rolled coil prices gained 1.2 percent to 3,931 yuan a tonne.
Steel products inventory at Chinese traders fell by 193,400 tonnes this week from a week earlier to 10.65 million tonnes, with stockpiles of construction product rebar falling 3.4 percent to 4.4 million tonnes, according to data compiled by Mysteel consultancy. Hot-rolled coil stockpiles rose 1.8 percent to 2.4 million tonnes.
“Falling inventory indicates firm demand at downstream users, which supports prices in both spot and futures market,” said analysts from CITIC Futures in a note.
However, steel mills in the regions where winter production restrictions have not yet kicked in are dashing to churn out more products to cash in on strong margins.
The weekly utilisation rates of blast furnaces at steel mills across the country reached 68.65 percent, up 0.56 percentage points from last week, according to Mysteel data.
Analysts expect the average output profit at steel mills to remain above 1,000 yuan a tonne.
Prices of steelmaking raw materials also ended up higher on Friday. The most-traded iron ore futures on the Dalian Commodity Exchange climbed 0.6 percent to 515 yuan a tonne.
Dalian coke futures soared as much as 3.6 percent to 2,537 yuan a tonne, highest since Aug.30, while coking coal prices rose 1 percent to 1,375 yuan. ($1 = 6.9129 Chinese yuan) (Reporting by Muyu Xu and Aizhu Chen; editing by Richard Pullin and Subhranshu Sahu)