* Iron ore, copper lead commodities rally, up more than 5 pct
* Markets eye further easing to support economic growth
* The mandated output curbs in Tangshan boost steel prices
SHANGHAI, July 13 Chinese commodity futures jumped to multi-month highs on Wednesday, extending a rally underpinned by expectations of further monetary policy easing to support growth and strong demand in some sectors.
Steel-related futures were also buoyed by government-ordered output curbs in a key producing area, while Shanghai copper futures prices were set for the biggest daily gain since late 2011.
Soft Chinese inflation and G20 concerns that the global recovery remains grim are hardening views among some economists that more government stimulus will be needed to support China, the world's second-biggest economy.
"(Steel) demand is strong as there are even supply shortages of some specific specs in some cities, while the capacity utilization rate has been high with limited upside room," said Xia Junyan, an investment manager of Hangzhou CIEC Trading Co in Shanghai.
"The strong fundamentals have attracted capital inflows. Funds are also bullish on steel futures as they expect easing monetary policy to support steel demand," Xia added.
The government of Tangshan, a big steel producing city in Hebei province, has ordered curbs of industrial production for the rest of July to improve air quality, fuelling optimism that steel supply contractions will lift prices further.
Steel mills which had expected a gloomy year in 2016 are currently able to make profits of 200 yuan to 500 yuan a tonne ($30 to $75 a tonne), driving prices of raw materials like iron ore and coke, traders said.
A Reuters poll showed that China's new yuan loans could have reached 1.04 trillion yuan in June up from 985 billion yuan in May.
Baosteel Group said on Thursday it plans to cut 9.2 million tonnes of capacity through 2018, as Beijing pushes for supply-side reform to tackle overcapacity.
The benchmark September iron ore futures on the Dalian Commodity Exchange surged 5.5 percent to 464 yuan a tonne by midday. It hit an 11-week session high of 465 yuan a tonne. Dalian coke futures surged 3.9 percent.
The October benchmark contract for rebar on the Shanghai Futures Exchange surged 3.3 percent to 2,572 yuan a tonne by midday. It earlier touched a high of 2,586 yuan, its highest since April 29.
Shanghai copper futures surged 5.4 percent and LME copper jumped 2.8 percent to above $5,000 a tonne for the first time since May 3. Shanghai nickel and rubber futures climbed 4.6 percent by midday break.
A spike in futures has also driven spot prices of iron ore.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI surged 6 percent to a 10-week high of $58.8 a tonne on Tuesday, according to The Steel Index.
"I don't know when prices will hit the ceiling but currently the market is full of bullishness and prices are expected to hit $60 a tonne soon," said an iron ore trader in Beijing.
