SAO PAULO: Brazilian stocks rose on Monday after the Chinese government ordered cutbacks to steel production, leading to tight supplies for some mill products and lifting shares of miner Vale SA.
Steel mills are expected to resume normal production from around mid-March, after the end of the ordered output cuts, about the time when steel demand seasonally picks up. That is raising expectations that steel mills will restock iron ore early next year.
Spot iron ore for delivery to China's Qingdao port surged, tracking a rally in Chinese rebar futures.
Shares of Brazil's Vale, the world's largest iron ore miner, rose 2.5 percent, adding the most points to Brazil's benchmark Bovespa stock index.
Steelmakers Cia Sider?rgica Nacional SA and Usinas Sider?rgicas de Minas Gerais SA also rose.
But traders in Brazilian markets remained cautious on lingering uncertainty over the approval of a bill streamlining the social security system, seen as key to curbing growth of public debt.
Lower House Speaker Rodrigo Maia has repeatedly stressed that he will still try to pass the plan this year, rushing to avoid delaying the crucial vote close to next year's wide-open presidential elections.
The Brazilian real firmed 0.2 percent, on a day when most Latin American currencies, such as the Mexican and Chilean pesos were nearly flat.
The US dollar advanced broadly after the US Senate approved a major tax overhaul at the weekend, though gains were limited as investors trimmed expectations of future US interest rate hikes.
While US officials have said the biggest change to tax laws since the 1980s would lift economic growth, investors said the boost would be minimal and is unlikely to force bond markets to radically alter their US monetary policy outlook in the coming months.
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