3 Min Read
* Shanghai rebar gives up gains to end flat
* Spot iron ore drops to lowest in almost a year
* China iron ore imports recover from six-month low (Adds China iron ore imports, updates prices)
By Manolo Serapio Jr
MANILA, June 8 (Reuters) - Iron ore futures in China dropped 2 percent on Thursday, falling for a third session in a row, reflecting weak appetite for the raw material as steel prices struggled to sustain their upward momentum.
Losses in Chinese futures could drag spot iron ore prices further, having declined to their lowest level in nearly a year on Wednesday.
The most-active iron ore contract for September delivery on the Dalian Commodity Exchange closed down 2 percent at 423 yuan ($62) a tonne.
"Iron ore consumption has come under pressure as Chinese steel mills look to spend funds on loan repayments due at the end of the quarter," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slid 1.1 percent to $55.43 a tonne on Wednesday, the lowest level since July last year, according to Metal Bulletin.
The spot benchmark, which touched $94.86 in February, has lost almost 30 percent this year, underperforming other commodities such as nickel and oil.
Adding to plentiful supplies at home, China's iron ore imports rose in May from a six-month low in April, reaching 91.52 million tonnes.
Stockpiles of the raw material at China's ports stood at 136.55 million tonnes last week, near the highest level since 2004. SH-TOT-IRONINV
After an early-year surge driven by Beijing's infrastructure spending, Chinese steel prices have fallen 15 percent from this year's peak as construction demand tapers off during summer.
The most-traded rebar on the Shanghai Futures Exchange ended nearly flat at 2,968 yuan per tonne after rising as much as 2 percent intraday. The construction steel product touched a one-month low on Tuesday, but rebounded on Wednesday to snap a nine-day slide.
Globally, BMI Research said it was keeping its average steel price forecast of $530 a tonne for this year and $500 in 2018. That compares to $484 last year.
"This reflects our belief that prices will trend lower in the second half of 2017 from current spot prices as a result of resilient Chinese production growth on the back of low iron ore and coking coal prices," BMI said in a report.
Chinese mills produced a record 72.78 million tonnes of crude steel in April, breaking the previous all-time high set in March. ($1 = 6.7932 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Sunil Nair)