SINGAPORE (Reuters) - Iron ore futures rose on Monday, supported by strong resupply demand from steel mills in China, amid healthy profit margins and low inventories, although expectations of production cuts in northern China limited gains.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) rose 0.82% to 796.5 yuan ($110.89) a tonne.

Benchmark September iron ore on the Singapore Exchange rose 1.32% to $103.45 a tonne.

Healthy margins and low inventories prompted steel mills to replenish their stockpiles, contributing to rising iron ore demand, although futures pared some gains due to investor expectations of steel production cuts in northern China ahead of a military parade on September 3, ANZ analysts said.

In July, China's blast furnace steel mills reported improved profits from finished steel sales despite rising production costs, mainly due to a rapid recovery in domestic steel prices, Chinese consultancy Mysteel said in a note.

Still, seasonal declines in consumption persist, with high temperatures and heavy rains significantly impacting construction and resulting in a buildup of steel inventories, Hexun futures said, adding that firm raw material prices supported steel prices.

Source: Notícias Agrícolas