BEIJING: Chinese ferrous futures jumped on Monday after the country's top steelmaking province of Hebei issued an anti-pollution alert over the weekend, with the most traded iron ore contract surging nearly 5% and coke rising more than 4% in early trade.
The northern Hebei province issued an orange smog alert - the second highest in a four-tier pollution alarm system - on Sunday in anticipation of a rise in pollution in the coming week, the local environment regulator said, ordering certain mills to cut sintering production.
Benchmark iron ore futures on the Dalian Commodity Exchange , for January delivery, surged as much as 4.8% to 827 yuan ($125.53) before cutting some of the gains to trade 2.9% higher at 812 yuan by 0330 GMT.
"While this temporary mandate looks to curb sintering and steel production, we understand the extent of these measures is less restrictive compared with those implemented at the same time last year," said Atilla Widnell, managing director of Navigate Commodities.
Portside iron ore inventories rose further, fuelled by rising shipments from miners and robust Chinese consumptions. They were up 1.4% from the week earlier to 130.8 million tonnes, as of Nov. 8, according to SteelHome consultancy data.
Steel futures on the Shanghai Futures Exchange also gained, with construction-used steel rebar rising 2.5% to 3,867 yuan a tonne and hot-rolle coils up 1.7% to 3,984 yuan per tonne.
Spot prices of iron ore with 62% iron content for delivery to China stood at $118.5 per tonne on Friday, SteelHome data showed.
Dalian coking coal edged up 0.3% to 1,303 yuan a tonne.
Dalian coke was up 3.8% at 2,480 yuan a tonne, after rising 4.1% earlier in the session.
Stainless steel futures climbed 0.9% to 13,970 yuan a tonne.
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