* Spot iron ore stays above $90/tonne, near 30-month peak
* Iron ore stocks at China ports highest since at least 2004 (Updates prices)
By Manolo Serapio Jr
MANILA, Feb 15 (Reuters) - Iron ore futures in China fell more than 1 percent on Wednesday after reaching a record high in a rapid rally spurred by rising steel prices that some market participants feel may have been overdone.
Both commodities had started their rally shortly after China returned from the Lunar New Year break this month, with mills replenishing iron ore stocks hoping steel demand would strengthen as construction activity picks up.
"Margins at steel mills have increased primarily from higher steel prices, but also as metallurgical coal and coke costs have declined," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
The most-active rebar on the Shanghai Futures Exchange closed down 0.8 percent at 3,391 yuan ($494) a tonne, after touching a two-month high of 3,458 yuan earlier.
Iron ore on the Dalian Commodity Exchange dropped 1.3 percent to end at 697.50 yuan per tonne, after initially peaking at 718 yuan. That matched the highest intraday level for the most-traded contract reached in October 2013, when the exchange launched iron ore futures.
"As China's activity normalises after the Chinese New Year holiday period we expect restocking demand to fall and prices to decline," Dhar said.
"Chinese steel demand expectations have supported steel and iron ore prices this year, but not to the extent that prices suggest."
Stocks of imported iron ore at China's ports reached 126.95 million tonnes on Feb. 10, the highest since at least 2004, according to data tracked by SteelHome. SH-TOT-IRONINV
Strong iron ore futures prices had helped boost bids for physical cargoes, pushing up the spot benchmark above $90 a tonne this week for the first time since 2014.
"While prices looked overvalued at above $90/tonne, we see little on the horizon that can drag prices lower," analysts at ANZ said in a note.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.6 percent to $91.71 a tonne on Tuesday, according to Metal Bulletin. The spot benchmark on Monday hit its strongest since August 2014 at $92.23.
$1 = 6.8668 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu