Steel futures in China grew to the highest level in three months, as the largest producer in the world is conducting environmental checks, while steel inventories continue shrinking, Bloomberg reports.

Futures at Shanghai Futures Exchange jumped by 2,5% showing the biggest intraday increase in five weeks and cost 3869 yuan ($605) per metric ton. Current price is more than 15% higher than a nine-month record level shown at the end of March.

China continues implementing its strategy that aims at reduction of pollution from industrial production and plans performing checks at plants in ten provinces.

The country produces half of world steel output.

Despite of demand slowdown in June, shrinking inventories and checks will put upper pressure on prices, experts think.

As a result of check, supply will most likely decline since factories will have to suspend production to adapt their operations to new rules.