Chinese iron ore futures climbed to their strongest level in almost two weeks on November 6, tracking firmer steel prices after China's top steel producing province Hebei beat its annual overcapacity cutback guideline.
Expectations that demand for the steelmaking raw material would pick up after China's steel production curbs over winter also underpinned prices.
Hebei has slashed 25.55 million tonnes of its steelmaking capacity so far this year, ahead of its annual target, the official Xinhua News agency reported on November 3. For further curb pollution during winter, which lasts from November through March, Hebei would also limit steel and iron output by 50% in major producing cities including Tangshan, Handan and Shijiazhuang, Xinhua reported.
The measures are in line with China's output restrictions for industrial plants including steelmakers, helping tighten supply. The most-traded rebar on the Shanghai Futures Exchange SRBcv1 rose as far as 3,750 yuan/t ($566/t), its loftiest since October. 26.
Steel's gains helped push up prices of raw materials iron ore and coking coal.
Iron ore on the Dalian Commodity Exchange DCIOcv1 was up 3.6% at 457 yuan/t after earlier peaking at 458 yuan/t, the highest since October 25. Coking coal DJMcv1 touched a two-week high of 1,164 yuan/t.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB stood at $59.88/t on November 3, up 0.2% from a day ago, according to Metal Bulletin. The spot benchmark hit $58.52/t on October 31, the lowest in more than four months.
(Writing by Alex Guo Editing by Harry Huo)
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