* Brazil’s Vale to cut 12.8 mln T iron ore output in Minas Gerais
* All Vale closures equal to 5.7 pct of seaborne market -Jefferies
* Utilisation rate at Chinese mills falls to 62.29 pct -Mysteel (Adds closing prices)
BEIJING, March 18 (Reuters) - Chinese iron ore futures rose by more than 3 percent to a two-week high on Monday, supported by concerns over tight supply of the steel-making raw material after Vale SA announced further production cuts.
The Brazilian miner said on Saturday that it would cut production at an iron ore mine in the state of Minas Gerais with annual capacity of 12.8 million tonnes and will also suspend operations at its Doutor dam.
This comes on top of the temporary closure of its Brucutu mine and other mines in southern states, which were expected to affect 70 million tonnes a year of production capacity.
“(The new closures) were not expected,” analysts from Jefferies said in a note. “It takes total expected gross capacity closures from Vale to a run rate of 83 million tonnes per year, which equates to a significant 5.7 percent of the seaborne iron ore market.”
The most-active iron ore futures on the Dalian Commodity Exchange jumped as much as 3.6 percent to 645 yuan a tonne, their highest since March 4, before closing up 1.6 percent at 632.50 yuan.
The impact of supply disruptions has been partly offset by falling demand at Chinese steel mills after local governments stepped up environmental restrictions ahead of the end of the winter anti-smog campaign in late-March.
Utilisation rates at steel mills across the country continued to fall last week, easing to 62.29 percent as of March 15, their lowest level in a year, data compiled by consultancy Mysteel showed.
Benchmark construction steel rebar prices on the Shanghai Futures Exchange closed down 0.4 percent at 3,781 yuan a tonne, while hot-rolled coil futures for May delivery climbed 0.5 percent to 3,697 yuan.
Among other steel-making raw materials, coke fell for a third session, closing down 1.1 percent at 1,968 yuan a tonne and coking coal finished 0.9 percent lower at 1,231 yuan a tonne.
$1 = 6.7136 Chinese yuan Reporting by Muyu Xu and Tom Daly; Editing by Richard Pullin and Sherry Jacob-Phillips