* Spot iron ore stays above $90/tonne, near 30-month peak
* Iron ore stocks at China ports highest since at least 2004
By Manolo Serapio Jr
MANILA, Feb 15 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
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)