* China’s factory activity shrank for 3rd month in July
* China won’t use property market for stimulus-Politburo
* Tangshan output curbs may be extended beyond Aug - trader (Recasts, adds closing prices and graphic)
By Enrico Dela Cruz
MANILA, July 31 (Reuters) - China’s steel rebar and iron ore futures surrendered gains to end little changed on Wednesday, after an official survey showed the nation’s factory activity shrank for the third month in a row in July, a trend some analysts say may continue.
While China will step up efforts to boost demand and support the economy, it will not use the property market as a form of short-term stimulus, a top decision-making body of the ruling Communist Party said on Tuesday.
The most-active construction steel rebar on the Shanghai Futures Exchange, for delivery in October, ended down 0.1% at 3,891 yuan ($565.25) a tonne, after rising 1% earlier in the session.
Hot-rolled steel, used in cars and home appliances, was up 0.2% at 3,806 yuan a tonne, well off the day’s peak at 3,840 yuan.
Wednesday’s weak manufacturing reading underlines the growing strains on the world’s second-biggest economy as the Sino-U.S. trade war hits business profits, confidence and investment.
Steel futures rose earlier in the session amid market talk that China’s top steelmaking city of Tangshan will extend its anti-smog production curbs throughout August.
Tangshan had stepped up anti-pollution measures over July 21 to 31 to meet its air quality targets, requiring some steel producers to curb their operations by up to 70%.
Traders and analysts said there was talk that curbs would be extended beyond July, although the August restrictions may be less strict.
The plan calls for a 20%-50% limit on sintering machines’ output, and 50% for some blast furnaces or a total shutdown, depending on emission levels, they said.
“For the moment, the new restrictions are only for August, but I believe this policy could be extended further,” a Shanghai-based trader said. “I think the government will continue the policy to prepare for the big events in October.”
China will celebrate its National Day holidays in October.
* The most-traded iron ore contract on the Dalian Commodity Exchange, with January 2020 expiry, was down 0.1% at 763 yuan a tonne by 0700 GMT.
* Dalian iron ore shot up to 789.50 yuan earlier in the session, the highest in more than five years, and posted its eighth consecutive monthly gain, as investors bet that the supply crunch will linger beyond 2019.
* Investors will hear from top iron ore miners Vale SA and Rio Tinto later this week as to whether they are able to increase output in coming months, ANZ said in a note.
* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was steady at $118 a tonne on Tuesday, based on data from SteelHome consultancy, near its $126.50 peak hit on July 3, which is the highest level since January 2014.
* Imported iron ore stockpiles at China’s ports climbed for a second straight week, rebounding to 119.25 million tonnes as of July 26 SH-TOT-IRONINV, SteelHome data showed. The inventory had shrunk earlier this month to the lowest since January 2017.
* Other steelmaking inputs were mixed, with Dalian coking coal up 0.4%, while coke slipped 1.0%.
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($1 = 6.8837 yuan)
additional reporting by Muyu Xu in BEIJING; editing by Richard Pullin & Uttaresh.V