* Weak futures dragged spot iron ore to six-week low
* But Dalian iron ore off lows after falling as much as 2.5
By Manolo Serapio Jr
MANILA, March 23 Iron ore futures in China
dropped to their lowest in more than two months on Thursday,
pressured by a continued slide in steel prices amid concern over
slower demand in the world's top consumer.
Chinese iron ore futures have lost more than 21 percent
since touching a record high last month, and its slump has
fuelled a 10 percent drop in spot iron ore prices during the
The most-traded iron ore on the Dalian Commodity Exchange
was down 1.3 percent at 584.50 yuan ($85) a tonne by
0315 GMT after falling to 577 yuan, its lowest since Jan. 10.
Iron ore tumbled nearly 16 percent on Wednesday, extending
losses in overnight trading, as the most-active contract rolled
over to September.
Heavy selling in iron ore futures was driven by concerns
over weaker demand, ANZ analysts said in a note.
"However, with steel production expected to lift in coming
months and disruptions to exports from Australia in recent
weeks, we expect this selloff to be relatively limited," they
The most-active rebar on the Shanghai Futures Exchange
was down 0.3 percent at 3,160 yuan per tonne, but had
come off a session trough of 3,118 yuan.
Iron ore's rally this year was spurred by the surge in
Chinese steel prices on hopes of stronger construction demand
along with Beijing's efforts to curb excess steel capacity. A
retreat in steel prices consequently pulled down iron ore as
market focus switched back to high inventory of the steelmaking
ingredient in China.
Iron ore stocked at China's major ports reached 131 million
tonnes on Friday, the highest since at least 2004, according to
SteelHome consultancy. SH-TOT-IRONINV
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
fell 3 percent to $84.99 a tonne on Wednesday, its weakest since
Feb. 9, according to Metal Bulletin.
The spot benchmark touched a 30-month high of $94.86 a tonne
on Feb. 21.
"We see iron ore prices falling to $60/tonne by year-end as
rising seaborne supply offsets a modest lift in iron ore
demand," Commonwealth Bank of Australia said in a note.
($1 = 6.8923 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Tom Hogue)