MANILA: Asia’s iron ore futures rose on Friday, underpinned by China’s revved-up campaign to curb steel output to meet its peak carbon emission target, but were set for their third straight weekly decline as price-control worries lingered.

Iron ore for September delivery on China’s Dalian Commodity Exchange rose as much as 5.2% to 1,074.50 yuan ($168.51) a tonne. The most-traded contract, however, has fallen more than 5% so far this week.

June iron ore on the Singapore Exchange advanced 1.6% to $186 a tonne. Top steel producer China’s recent statements on steel capacity reforms had sparked concerns about tight supply prospects, pushing prices to record highs earlier this month.

Surging prices had led to strong margins, encouraging steel producers to ramp up output and purchases of raw material iron ore. But that fuelled inflation worries, prompting authorities to warn against “unreasonable” price gains.

Benchmark 62% iron ore’s spot price, which touched a record $232.50 a tonne on May 12, fell and traded at $191.50 on Thursday, SteelHome consultancy data showed. Commodities markets have seen a marked increase in volatility following Chinese Premier Li Keqiang’s reiteration of the importance of controlling overheated commodity prices at a recent cabinet meeting, JP Morgan analysts said in a note.

“The government’s track record in fighting high commodity prices has had mixed results, especially when supply is limited by tight environmental controls,” they said. Prices are likely to soften in the current quarter as demand slows, but may pick up in the third quarter “as the structural demand growth story remains intact on healthy property and (fixed asset investment) data”, the analysts said.

Steel for October deliveries rose, with construction material rebar on the Shanghai Futures Exchange up 3.4% by 0330 GMT, while hot-rolled coil climbed 4.2%.

Stainless steel gained 3.3%. Dalian coking coal advanced 1.3% and coke jumped 1.8%. —Reuters