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China ferrous futures gain on rising industrial metals consumption

BEIJING, March 18 (Reuters) - Chinese ferrous futures rose on Thursday, lifted by rising consumption of industrial metals while concerns about steel output curbs also underpinned prices.

“Steel products inventory had shown the turning point and downstream demand is picking up,” Huatai Futures analysts said in a note, referring to a drop in stockpiles this week.

Recent market talks on “carbon neutrality” and “production curbs” also fuelled prices from the supply side, they added.

Construction steel rebar on the Shanghai Futures Exchange , for May delivery, gained 1.3% to 4,799 yuan ($738.85) a tonne by 0330 GMT.

Hot rolled coil futures, used in the manufacturing sector, increased 1.1% to 5,004 yuan per tonne.

Shanghai stainless steel futures were almost flat at 13,945 yuan a tonne.

Steel prices were supported by rising raw material prices as futures on the Dalian Commodity Exchange also gained.

Dalian coking coal inched up 0.5% to 1,577 yuan and coke jumped 2.3% to 2,331 yuan per tonne.

Benchmark iron ore futures on the Dalian bourse rose 2.1% to 1,086 yuan a tonne.

Huatai Futures however warned that with carbon emission controls and overall crude steel output-cut plan, iron ore consumption could fall.

Spot 62% iron ore prices stood at $166 a tonne on Wednesday SH-CCN-IRNOR62, data from SteelHome consultancy showed.

FUNDAMENTALS

* Morgan Stanley said anti-pollution measures in China’s top steelmaking city of Tangshan could be the beginning of “major” iron ore market headwinds, potentially taking it from a significant deficit to balance.

* Brazil’s February steel sales rose by 20.9% to 1.88 million tonnes from a year ago, according to trade group Aço Brasil.

* ArcelorMittal will offer green certificates to customers willing to pay a premium for low-carbon steel as it also launched a fund to support breakthrough technologies to curb carbon emissions from steelmaking.

$1 = 6.4952 Chinese yuan Reporting by Min Zhang and Dominique Patton; Editing by Subhranshu Sahu

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