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EMERGING MARKETS-Brazil stocks rise as China output cuts boost iron ore

SAO PAULO, Dec 4 (Reuters) - Brazilian stocks rose on Monday after the Chinese government ordered cutbacks to steel production, leading to tight supplies for some mill products and lifting shares of miner Vale SA. Steel mills are expected to resume normal production from around mid-March, after the end of the ordered output cuts, about the time when steel demand seasonally picks up. That is raising expectations that steel mills will restock iron ore early next year. Spot iron ore for delivery to China's Qingdao port <.IO62-CNO=MB> surged, tracking a rally in Chinese rebar futures. Shares of Brazil's Vale, the world's largest iron ore miner, rose 2.5 percent, adding the most points to Brazil's benchmark Bovespa stock index. Steelmakers Cia Siderúrgica Nacional SA and Usinas Siderúrgicas de Minas Gerais SA also rose. But traders in Brazilian markets remained cautious on lingering uncertainty over the approval of a bill streamlining the social security system, seen as key to curbing growth of public debt. Lower House Speaker Rodrigo Maia has repeatedly stressed that he will still try to pass the plan this year, rushing to avoid delaying the crucial vote close to next year's wide-open presidential elections. The Brazilian real firmed 0.2 percent, on a day when most Latin American currencies, such as the Mexican and Chilean pesos were nearly flat. The U.S. dollar advanced broadly after the U.S. Senate approved a major tax overhaul at the weekend, though gains were limited as investors trimmed expectations of future U.S. interest rate hikes. While U.S. officials have said the biggest change to tax laws since the 1980s would lift economic growth, investors said the boost would be minimal and is unlikely to force bond markets to radically alter their U.S. monetary policy outlook in the coming months.

Key Latin American stock indexes and currencies at 1555 GMT:

Stock indexes daily % YTD %

change change Latest

MSCI Emerging Markets 1121.48 0.5 29.42 MSCI LatAm 2742.75 0.48 16.62 Brazil Bovespa 72713.52 0.62 20.73 Mexico S&P/BVM IPC 47061.35 -0.43 3.11 Chile IPSA 5044.30 0.4 21.51 Chile IGPA 25370.54 0.38 22.36 Argentina MerVal 27042.45 0.37 59.85 Colombia IGBC 10795.39 -0.41 6.59 Venezuela IBC 1408.63 3.73 -95.56 Currencies daily % YTD %

change change

Latest

Brazil real 3.2495 0.18 -0.01 Mexico peso 18.6450 -0.11 11.26 Chile peso 648.37 -0.09 3.44 Colombia peso 2991.41 0.20 0.34 Peru sol 3.234 0.00 5.57 Argentina peso (interbank) 17.2700 -0.23 -8.08 Argentina peso (parallel) 17.99 0.11 -6.50

(Reporting by Bruno Federowski; Editing by Meredith Mazzilli)