Steel price rise in China to five-year level

Steel prices in China rose 1.7 percent on Friday to their highest level since 2013, boosted by strong demand and expectations of a decline in production following pollution in the country's upper manufacturing centers.

The most active rebar contract on the Shanghai Futures Exchange added 1.7 percent to 4,072 yuan per tonne at 0202 GMT, after earlier climbing to 4,078 yuan per tonne, the highest since February 2013. Iron ore on the Dalian Mercantile Exchange rose 2.8 percent to 489 yuan a ton.

Other steel-making materials were also obtained. Coke rose 2.7 percent to 2,141.5 yuan a tonne, while coking coal added 1.1 percent to 1,204.5 yuan a tonne.

“The China Association of Iron and Steel Companies has warned that the industry enjoyed significant stability in the first half, but it has warned that this will not be guaranteed,” ANZ said in a memo.

"This indicated that demand remains high and production is at high levels, causing inventories to fall."

For the week, rebar rose 2.3 percent and iron ore 4.3 percent.

The Environment Ministry said on Monday that it has raised its monthly air quality ratings to 169 cities from 74 to increase pressure on local governments as it ramps up its campaign against air pollution.

The market relied on tighter supplies due to tight production restrictions in Tangshan, the country's steelmaking city in Hebei province.

Brazil's Vale, the world's largest iron ore producer, was hoping for strong demand. He predicts robust mineral prices and higher premiums for his high-quality ore, driven by strong demand from China and despite global trade tensions.