* Dalian iron ore, Shanghai rebar hit multi-year highs this
* Spot iron ore could still top $100/tonne - CMC Markets
By Manolo Serapio Jr
MANILA, Feb 24 China's iron ore futures slid
nearly 5 percent on Friday and were headed for a weekly loss
after a rapid rally underpinned by expectations that strong
infrastructure spending would spur steel demand in the world's
The fall pulled iron ore futures further away from a record
high reached earlier in the week, and should similarly drag down
spot prices, which have climbed to multi-year highs near $100 a
The most-traded iron ore on the Dalian Commodity Exchange
was down 4.9 percent at 681 yuan ($99) a tonne, after
initially touching a two-week low of 674 yuan. The contract,
which hit a record high of 741.50 yuan on Tuesday, was down 2.6
percent for the week.
"The size of today's move does reflect the speed with which
iron ore has risen. But I suspect we will find a base over the
next session or two before moving higher again," said Michael
McCarthy, chief market strategist at CMC Markets.
For some investors, it's "a shorting opportunity looking for
a more normal iron ore price," he said.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
fell 3.1 percent to $91.34 a tonne on Thursday, according to
Metal Bulletin. The spot benchmark, which hit a 30-month peak of
$94.86 on Tuesday, was still up 1.1 percent so far this week.
"The underlying supply-demand (condition) is supportive of
higher prices in my view. I wouldn't be surprised to see an iron
ore price above $100 a tonne," said McCarthy.
Iron ore prices have tracked the rally in China's steel
market that had been supported by hopes of a pickup in
construction activity from next month as well as Beijing's
efforts to boost infrastructure investment to spur the economy.
"While we continue to believe that steel and iron ore prices
are factoring in overly optimistic demand projections, China is
likely to keep infrastructure investment, particularly
transport, supported to shore up growth before elections in
November," Commonwealth Bank of Australia analyst Vivek Dhar
said in a note.
The most-active rebar on the Shanghai Futures Exchange
dropped 2.9 percent to 3,411 yuan per tonne, after
hitting a three-year high of 3,630 yuan on Tuesday.
($1 = 6.8712 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Amrutha Gayathri)