BEIJING/SINGAPORE - Iron-ore prices climbed on Friday as top consumer China's widening restrictions on buying some seaborne cargoes from major supplier BHP sparked supply concerns that outweighed falling demand.

The most-traded iron-ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 closed daytime trade 1.38% higher at 772 yuan ($111.90) a metric ton, with the contract rising 2.54% this week.

The benchmark April iron ore SZZFJ6 on the Singapore Exchange advanced 1.53% to $101.55 a ton, as of 0725 GMT. The contract has risen 3.24% so far this week.

Both contracts touched one-month highs earlier in the session.

China's state-run iron-ore buyer told several traders this week to buy fewer seaborne cargoes of BHP's flagship products, including Mac fines and Newman fines, people with knowledge of the matter told Reuters, as a months-long contract dispute drags on.

China had already barred domestic steelmakers and traders from buying BHP's Jimblebar fines since September and extended the ban to another BHP brand, Jinbao fines, in November.

The latest restrictions have fuelled fears about the availability of certain seaborne cargoes, traders said, as BHP is the world's third-largest iron-ore producer and a key supplier to the global market.

However, gains were limited by faltering demand amid lingering production restrictions at steel mills in North China.

The average daily hot metal output, a gauge of iron ore demand, slid by 2.4% to the lowest since December to 2.28-million tons by March 5, data from consultancy Mysteel showed.

Moreover, China reiterated its pledge to tackle overcapacity in steel and other industries, according to a report released during the annual parliamentary meeting, a move that could curb appetite for feedstocks.

Other steelmaking ingredients gained ground with coking coal DJMcv1 and coke DCJcv1 up 1.86% and 0.47%, respectively.

Steel benchmarks on the Shanghai Futures Exchange mostly advanced. Rebar SRBcv1 added 0.26%, hot-rolled coil SHHCcv1 gained 0.31%, wire rod SWRcv1 edged up 0.06% and stainless steel SHSScv1 dipped 0.49%.