* Bullish sentiment seen intact as Chinese futures bounce
* Iron ore, steel gain about 6 pct for the week
* 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
closed down 0.5 percent at 3,345 yuan ($485) a tonne,
but well off the day's low of 3,213 yuan.
The construction steel product gained 6.2 percent for the
week after touching a 31-month peak on Wednesday.
Iron ore on the Dalian Commodity Exchange closed
2.6 percent lower at 618 yuan per tonne, having fallen more than
6 percent earlier. The steelmaking raw material hit a nearly
three-year high on Thursday and rose 5.9 percent this week.
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 = 6.8997 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Sunil Nair)