BEIJING, April 2 (Reuters) - Benchmark iron ore futures in China rose on Friday after September delivery took over as the most-traded contract, but were on course for 10% decline this week on production curbs, while steel prices maintained their upward momentum. China’s state planner and industry ministry said on Thursday that they would launch an inspection on implementation of steel capacity cut in the past few years, and reiterated fewer crude steel output in 2021 to reduce emissions. Capacity utilisation rates at 163 blast furnaces in China fell to 76.92% this week, the lowest level since October 2019, data from Mysteel consultancy showed. The most-active iron ore futures on the Dalian Commodity Exchange gained 1.4% to 975 yuan ($148.53) per tonne by 0330 GMT and are set to fall 10.4% this week. Steel futures, meanwhile, extended gains on continuously recovering consumption. Apparent demand for rebar and hot rolled coil rose by 7% and 2% week-on-week, respectively. The most-traded May contract for rebar on the Shanghai Futures Exchange jumped 2.6% to 5,104 yuan a tonne, sending its weekly gain to a ninth straight week. Hot-rolled coil futures rose 2.2% to 5,540 yuan a tonne and are expected to clock a fourth weekly increase. FUNDAMENTALS * Dalian coking coal futures fell 2.5% to 1,574 yuan per tonne. * Coke futures rose 1.1% to 2,351 yuan a tonne. * Spot prices of iron ore with 62% iron content for delivery to China gained by $2 to $168 a tonne on Thursday. * Shanghai stainless steel futures, for June delivery, inched down 0.2% to 14,280 yuan per tonne. * Trading on the Shanghai Futures Exchange and Dalian Commodity Exchange will be halted on April 5 for the Tomb Sweeping holiday. ($1 = 6.5642 Chinese yuan) (Reporting by Min Zhang and Shivani Singh; editing by Uttaresh.V)