Miners lift FTSE on China’s plan to limit future steel production

BLUE-CHIP mining giants propped up a sleepy FTSE 100 yesterday after China said it will impose a winter cap on steel and aluminium production to clean up the Asian powerhouse’s smog-choked cities, causing iron ore prices to surge.

The Chinese government will restrict production in four northern provinces during the winter heating months when pollution reaches unbearable highs, and traders are now upping purchases to compensate for the future supply cut.

John Meyer, an SP Angel analyst, said that traders were bringing forward purchases as “this warning combined with existing production capacity cuts and the ongoing antipollution crackdown is restricting annual output”.

With iron ore prices rallying to a four-month high in anticipation of the cut, base metal producing giants Rio Tinto and

Glencore jumped to the top of the blue-chip scoreboard, advancing 91p to £36.37 and 8.8p to 364.6p respectively.

Peer Anglo American rose 39.5p to £13.10, while Anglo-australian miner

BHP Billiton pushed up 31p to £13.96, the sector’s gains helping the FTSE 100 close 20.33 points higher at 7,531.94.

On the mid-cap FTSE 250, iron ore specialist Ferrexpo topped the index, investors ignoring the slew of broker downgrades that followed its interim results last week to push the miner 13.9p higher to 262.1p.

Qinetiq enjoyed a strong day of trading after Goldman Sachs decided that the defence technology group had been shunned by investors for long enough, citing its improving organic growth and cheap valuation.

Upgrading it to “neutral” from “sell”, analyst Chris Hallam told clients that the defence specialist’s underperformance of the wider London market since the broker put Qinetiq on its “sell” list 18 months ago now made the stock a more appealing pick for investors.

While the company, which nosedived last month on an order slowdown, will face increasing margin pressure, its modernisation could help it secure new contracts and stoke growth. It closed 7p higher at 241.8p.

Meanwhile, housebuilding big hitters

Persimmon and Taylor Wimpey rebounded 55p to £25.19 and 3.6p to 191.5p, respectively, after Friday’s sell-off related to press speculation later denied by the Government that it could end or taper its Help to Buy scheme before its initial 2021 end date.

The sector’s sharpest faller following the reports, Barratt Developments,

however, continued to lag behind its peers, adding 9.5p to 598.5p.

Finally, five-a-side pitch operator Goals Soccer

Centres soared 9.5p to 108.5p after Mike Ashley’s Sports Direct increased its stake in the Aim-listed company to 4.77pc.