3 Min Read
* Dalian iron ore futures also on track for 3rd weekly drop in 4
* BMI Research cuts iron ore price forecasts
* Shanghai rebar down for fourth straight day
By Manolo Serapio Jr
MANILA, May 26 (Reuters) - Spot iron ore prices were on course to post their third weekly fall in four, still pressured by plentiful supply in top consumer China and a retreat in Chinese steel prices.
Spot iron ore has largely tracked losses in Chinese steel futures which dropped for a fourth consecutive session on Friday and were also headed for a third weekly fall in four.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.5 percent to $60.24 a tonne on Thursday, according to Metal Bulletin, and has fallen 3.9 percent so far this week.
The spot benchmark has dropped from a high of $94.86 a tonne in February as stockpiles of the steelmaking raw material at China's ports reached a 13-year high, underlining slow demand.
Speculative pressure in China's futures exchange has also dragged down iron ore prices, analysts at National Australia Bank (NAB) said in a note.
"That speculative pressure - rather than underlying fundamentals - appears to be driving prices at the present time and increases the risk of price volatility in the short term," they said in a report.
The most-active iron ore contract on the Dalian Commodity Exchange was down 1.6 percent at 449.50 yuan ($66) a tonne by 0226 GMT, and has dropped 5 percent for the week.
Stockpiles of imported iron ore at China's ports reached 136 million tonnes last week, the most since 2004, according to SteelHome consultancy. SH-TOT-IRONINV
"Weaker prospects for Chinese steel producers from domestic and international markets should limit upside pressure to iron ore spot prices," said NAB analysts. The bank expects iron ore to average $68 a tonne this year and $60 in 2018.
BMI Research has cut its iron ore price estimates, to $65 in 2017 from $70 previously and to $50 in 2018 from $55.
BMI said it anticipates the "Chinese government's fiscal support to the infrastructure and construction sectors will cool off earlier in 2017 than we previously expected."
The most-active rebar on the Shanghai Futures Exchange was down 2.1 percent at 3,186 yuan a tonne, retreating for a fourth day in a row.
$1 = 6.8608 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu