News: RIO UPDATE 1-Shanghai steel futures rebound on talks of extended Tangshan output curbs

• Tangshan drafts less strict anti-smog plan for Aug -traders
• Iron ore scales over 5-yr high, set to log 8th monthly gain
• China steel firms lagging on carbon compliance - study

(Updates with quotes and midday prices)

Steel futures in China rose on Wednesday, rebounding from two days of losses, amid market talk that the nation's top steelmaking city of Tangshan has drafted a plan to extend anti-pollution production curbs throughout August.

Chinese iron ore futures climbed for a fifth session and were set to post their eighth consecutive monthly gain, as market participants bet that supply constraints will linger beyond 2019 and keep spot prices high.

The most-active construction steel rebar on the Shanghai Futures Exchange SRBcv1 , for delivery in October, jumped as much as 1.0% to 3,932 yuan ($571.49) a tonne. It ended the morning session up 0.6%.

Hot-rolled steel SHHCcv1 , used in cars and home appliances, was up 0.8% at 3,829 yuan a tonne by midday break.

Tangshan had stepped-up anti-pollution measures over July 21 to 31 to meet its air quality targets, requiring some steel producers to curb their operations by up to 70%.

Traders and analysts said there was talk that curbs would be extended beyond July, although the August restrictions may be less strict.

The plan calls for a 20%-50% limit on sintering machines' output, and 50% for some blast furnaces or a total shutdown, depending on emission levels, they said.

"For the moment the new restrictions are only for August, but I believe this policy could be extended further," a Shanghai-based trader said. "I think the government will continue the policy to prepare for the big events in October."

China will celebrate its National Day holidays in October.

FUNDAMENTALS

• The most-traded iron ore contract on the Dalian Commodity Exchange DCIOcv1 , with January 2020 expiry, gained as much as 3.3% to 789.5 yuan ($114.75) a tonne, the highest in more than five years. It ended the morning session up 2.8%.
• "Despite Chinese port inventories recording another gain this week, the market continues to fret about the ongoing mine closures in Brazil," ANZ said in a note.
• Investors will hear from top iron ore miners Vale SA VALE3.SA and Rio Tinto (RIO) RIO.L later this week as to whether they are able to increase output in coming months, ANZ said.
• Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was steady at $118 a tonne on Tuesday, based on data from SteelHome consultancy, near its $126.50 peak hit on July 3, which is the highest level since January 2014.
• Imported iron ore stockpiles at China's ports climbed for a second straight week, rebounding to 119.25 million tonnes as of July 26 SH-TOT-IRONINV , SteelHome data showed. The inventory had shrunk earlier this month to the lowest since January 2017.
• Other steelmaking inputs were trading mixed, with Dalian coking coal DJMcv1 up 0.7% at 1,403.5 yuan a tonne, while coke DCJcv1 slipped 0.4% to 2,155 yuan.
• Chinese steel companies have fallen behind their international counterparts on energy efficiency and carbon compliance, putting them at risk of a surge in costs once regulations are tightened, a research report published on Wednesday said.
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($1 = 6.8803 yuan)