* Bullish sentiment seen intact as Chinese futures bounce
* Iron ore seen skewed to the upside over next 12 months -
By Manolo Serapio Jr
MANILA, Dec 9 Iron ore and steel futures in
China edged lower on Friday as investors locked in gains after a
six-day rally anchored on firm demand and Beijing's bid to
address a steel glut.
But prices of both commodities came off session lows,
suggesting the bullish market sentiment was largely intact.
China has been cracking down on mills producing low-quality
steel, those expanding operations illegally and those
aggravating the country's pollution problem, helping tighten
supply at a time when some traders are replenishing stocks in
anticipation of demand staying strong through next year.
The most-active rebar on the Shanghai Futures Exchange
was down 0.1 percent at 3,359 yuan ($487) a tonne by
midday, but well off the day's low of 3,213 yuan.
The construction steel product has gained 7 percent for the
week so far after touching a 31-month peak on Wednesday.
Iron ore on the Dalian Commodity Exchange was down
2.1 percent at 621.50 yuan per tonne, having fallen more than 6
percent earlier. The steelmaking raw material hit a nearly
three-year high on Thursday and has also gained 7 percent this
Data on Thursday showed China's iron ore imports jumped in
November to the third highest on record at nearly 92 million
"We think the likelihood of a sustained downturn in iron ore
prices looks increasingly unlikely, with risks skewed to the
upside over the next 12 months," Daniel Hynes, commodity
strategist at ANZ Bank, wrote in a report.
"A combination of seasonally strong steel demand in China
and risks of further supply disruptions could see the market
enter a period of tightness in the second half of 2017, which
should support prices."
The strength in futures this week propelled spot iron ore
back above $80 a tonne to the highest since October 2014. Iron
ore for delivery to China's Qingdao port .IO62-CNO=MB stood at
$81.78 a tonne on Thursday, a day after touching a two-year
high, according to Metal Bulletin. It has risen over 5 percent
($1 = 6.8995 Chinese yuan)
(Reporting by Manolo Serapio Jr.)