* Shanghai rebar, Dalian ore hit upside limit on short
covering
* Sparks deals on globalORE platform, SGX iron ore futures
climb
* China iron ore imports at 2nd highest on record in Sept
By Manolo Serapio Jr
SINGAPORE, Oct 13 (Reuters) - Chinese steel and iron ore
futures surged 4 percent to reach their upside limits on Monday
as investors covered short positions on expectations prices may
have hit bottom after sliding to record lows over the past two
weeks.
Steel and iron ore easily outperformed other commodities
traded in China, sparking a flurry of physical deals on iron ore
platform globalORE.
Helping brighten investor sentiment was data showing China's
overall exports rose more than forecast and imports unexpectedly
gained in September.
The most-traded rebar for January delivery on the Shanghai
Futures Exchange rose as much as 4 percent to hit its
exchange-set ceiling of 2,664 yuan ($435) a tonne, before paring
gains to stand at 2,641 yuan by midday, up 3.1 percent.
On the Dalian Commodity Exchange, the January iron ore
contract rose as much as 3.9 percent to touch its
upside limit of 584 yuan a tonne. It was last up 3.4 percent a
581 yuan.
"It's short covering. I think generally the market is coming
round to the idea that maybe we hit a short-term bottom and
there are massive speculative short positions in both markets,"
said Graeme Train, analyst at Macquarie in Shanghai.
"I don't think the fundamentals would really justify a 4
percent leap in the day, so it's just a reflection of how short
the market was."
Iron ore futures in Singapore also climbed. The November
contract on the Singapore Exchange rose 3.1 percent to
$82.87 a tonne.
The Chinese economy is also likely to reaccelerate in terms
of activity after weakness in recent months, analyst Train said.
China's exports rose 15.3 percent in September from a year
earlier, beating forecasts in a Reuters poll for a rise of 11.8
percent. Imports rose 7 percent, defying expectations for a 2.7
percent fall and calming concerns about deteriorating domestic
demand in the world's No. 2 economy.
China's iron ore imports rose 13 percent from August to
84.69 million tonnes in September, the second highest monthly
volume on record, customs data showed.
The robust imports reflect continued strong supply from top
exporter Australia, said Train, adding that some shipments for
October may have been counted in September because of the Oct.
1-7 National Day holiday.
"Australia and Brazil's output should be stronger in the
fourth quarter plus there's potential for a little bit of
restocking on the mills' side that would keep demand reasonably
elevated and keep imports rising for the rest of the quarter,"
he said.
Six Australian iron ore cargoes were sold on the globalORE
platform in Singapore, five of which were 62-percent grade
material sold at between $83.50 and $84.50 per tonne, according
to the platform's website.
Those prices were up from deals done at just above $80 a
tonne on Friday for the same grade, suggesting further upside
potential for the benchmark price.
Benchmark 62-percent grade iron ore for immediate delivery
to China .IO62-CNI=SI rose half a percent to $79.90 a tonne on
Friday, according to data compiled by the Steel Index.
The price fell to $77.50 at the end of September, its
weakest level in five years.
"I think the price can stabilise around $80 for a while,
this is a price that looks acceptable for both suppliers and
buyers," said an iron ore trader in China's eastern Shandong
province.
Rebar and iron ore prices at 0339 GMT
Contract Last Change Pct Change
SHFE REBAR JAN5 2641 +79.00 +3.08
DALIAN IRON ORE DCE DCIO JAN5 581 +19.00 +3.38
SGX IRON ORE FUTURES NOV 82.87 +2.50 +3.11
THE STEEL INDEX 62 PCT INDEX 79.9 +0.40 +0.50
METAL BULLETIN INDEX 80.24 +1.36 +1.72
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
(1 US dollar = 6.1256 Chinese yuan)
(Editing by Himani Sarkar)