Iron ore lowers

MANILA: Chinese iron ore futures pulled back from a three-year high on Tuesday as steel prices steadied after gaining more than 14 percent so far this month on Beijing´s renewal of its push to slim down a bloated industry.

Expectations that China will continue to reduce excess steel capacity could keep prices of the metal elevated, spurring mills to replenish stocks of raw materials including iron ore.

The most-traded iron ore on the Dalian Commodity Exchange jumped more than 4 percent to hit an intraday peak of 664.50 yuan ($96) a tonne, its strongest since December 2013. It later trimmed gains to 642 yuan at 0246 GMT, up 0.9 percent.  Rebar on the Shanghai Futures Exchange was flat at 3,321 yuan a tonne, earlier gaining as much as 2.5 percent.

Higher steel prices have increased the profitability of Chinese mills significantly and "that´s certainly given them confidence to restock raw materials such as iron ore," said Daniel Hynes, commodity strategist at ANZ.  Monday´s spike in iron ore futures helped lift spot prices to their highest in more than two years, with some traders building up steel inventories on expectations of further price increases.