Dalian iron ore climbs over 2%
Singapore benchmark rise more than 1%
Higher costs lift some steel benchmarks up
(Recasts, updates closing prices, adds Rio accident in paragraph 6)
BEIJING, May 13 (Reuters) - Iron ore futures prices strengthened on Monday, as news of more bond issuance by Chinese authorities to spur economic growth outweighed the impact of weaker-than-expected credit data in the top consumer.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 shrugged off earlier losses and ended daytime trading 2.42% higher at 888 yuan ($122.75) a metric ton.
The benchmark June iron ore SZZFM4 on the Singapore Exchange was trading 1.25% higher at $117.25 a ton, as of 0820 GMT.
China's finance ministry said on Monday it will start the long-awaited sales of long-term special treasury bonds that Beijing hopes will help stimulate key sectors of a flagging economy this week, confirming what Reuters reported earlier citing sources.
Underpinning prices of the key steelmaking ingredient is also fear over temporary supply disruption following a train accident in Rio Tinto, the world's largest iron ore supplier.
Rio Tinto (RIO) said on Monday an autonomous train had derailed at its Western Australian iron ore operations overnight with investigation underway and no one being hurt.
Earlier the session, both benchmarks posted losses as weak data and mixed fundamental signals weighed.
Chinese banks extended 730 billion yuan in new yuan loans in April, down sharply from 3.09 trillion yuan in March and falling short of analysts' expectations, data from its central bank on Saturday.
Strength in hot metal output reflected growing demand for the key steelmaking ingredient amid persistent production resumption among mills, while the absolute portside ore inventories still hovered at relatively high levels, weighing on ore prices, said analysts at Huatai Futures in a note.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 1% and 0.79%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar SRBcv1 ticked 0.93% higher, hot-rolled coil SHHCcv1 edged up 0.61%, stainless steel SHSScv1 was flat, while wire rod SWRcv1 nudged down 0.13%.
The state-backed Chinese steel association called on steelmakers to cut back record high inventories on Friday as the sector struggles with oversupply.
($1 = 7.2345 Chinese yuan)
