BEIJING: Chinese construction steel rebar climbed for a third session in a row on Friday as concerns over tight supply intensified amid tightening environmental measures in top steelmaking city Tangshan.

Tangshan in the province of Hebei, accounting for more than 10 percent of the country's steel output last year, ordered steel makers to shut all their sintering machines from Dec.20 to Dec.31 and steel rolling plants and miners to close, according to reports from industrial websites.

The city government said in a statement on Thursday night that the recent weather condition will not help blow off air pollution but emergency measures could help lower the concentration of smog.

At least three other cities in the province of Hebei, including provincial capital Shijiazhuang, have issued smog-alerts, asking industrial plants to reduce at least an average of 30 percent output this week.

The most-active rebar futures on the Shanghai Futures Exchange closed 1.5 percent higher to 3,508 yuan ($508.86) a tonne, after touching a 5-week peak at 3,535 yuan earlier in the session.

Weekly utilisation rates at steel mills in China fell to their lowest level since early April this week, at 65.06 percent, according to data compiled by Mysteel Consultancy. The rates were down 0.69 percentage points from a week ago, but still much higher than 62.15 percent in the same period last year.

“Steel mills have reduced production due to tightened environmental measures, but traders still worry about weak demand," said a Beijing-based steel trader.

Stocks of steel products at Chinese traders declined for an 11th consecutive week as of Friday, down 70,000 tonnes from the prior week at 7.89 million tonnes, the lowest in a year, Mysteel data showed. That indicates the restocking process at traders' side has not started.

Most steelmaking raw materials rose alongside steel prices.

The most-traded iron ore contract for May delivery on the Dalian Commodity Exchange climbed 1.2 percent to 497 yuan a tonne.

Coke futures gained 0.8 percent to 1,993 yuan, while coking coal prices edged up 0.3 percent to 1,198.5 yuan.

Copyright Reuters, 2018