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SHANGHAI: Chinese steel futures rose for a seventh straight session on Thursday on lingering concerns over supply prospects as the world’s top producer of the construction and manufacturing material seeks to reduce output this year.

The most-active October construction steel rebar and hot rolled coil contracts on the Shanghai Futures Exchange both touched their strongest levels since June 15, helping Dalian iron ore recover after two days of declines.

Shanghai rebar rose as much as 1.8% to 5,198 yuan ($803.87) a tonne, while hot rolled coil - which is steel used in car bodies and home appliances - gained 1.7% to 5,494 yuan a tonne.

Steelmaking ingredient iron ore’s most-traded September contract on the Dalian Commodity Exchange climbed 3.3% to 1,191 yuan a tonne.

China has vowed to ensure its crude steel output falls in 2021 and look into the implementation of steel capacity cuts since 2016 as the country aims to meet goals to curb emissions.

In the eastern Chinese province of Anhui, steel mills have been required to “formulate a crude steel production reduction task breakdown table” and told that “actual output in 2021 is not allowed (to be) more than 2020 (levels)”, according to analysts at Sinosteel Futures.

“According to this requirement, after the June output is estimated, it is expected that the crude steel output from July to December 2021 will need to be reduced by about 3.5 million tonnes year-on-year, with an average daily reduction of 19,000 tonnes,” they said in a note.

Iron ore’s most-active August contract on the Singapore Exchange also rose, up 1% at $205.15 a tonne by 0250 GMT.

Spot prices of benchmark 62%-grade iron ore bound for China also remained well supported above $200 a tonne, showed SteelHome consultancy data.

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