January 13, 2017 / 3:30 AM / 7 months ago

UPDATE 2-China iron ore imports slip in Dec, but hit record for 2016

* Dec imports drop from record high marked in previous year

* Steel demand has slowed in winter months

* But total 2016 shipments top 1 billion tonnes (Recasts; adds analyst comment, details)

By Josephine Mason and Manolo Serapio Jr

BEIJING, Jan 13 (Reuters) - China's iron ore imports slipped 8 percent in December from a record a year earlier amid seasonal weakness in steel demand, but purchases for the full year hit an all-time high and could remain strong in 2017.

While the 2016 total reflects strong Chinese demand for the steelmaking raw material, it also shows the increased availability of seaborne supply, displacing higher-cost production at home.

Imports rose 7.5 percent to 1.024 billion tonnes in 2016, data from the General Administration of Customs showed, as economic stimulus measures sustained steel demand in the world's top consumer even as the government cracked down on excess capacity.

For December, iron ore imports reached 88.95 million tonnes, down 3.2 percent from November and from the monthly record of 96.26 million tonnes set in December 2015. Arrivals in December were still the third highest for 2016.

Steel demand typically slows in the cold winter months.

"You should see China's (annual) iron ore imports rise once more," said CLSA head of research Andrew Driscoll.

"We're forecasting crude steel production to rise about 1 percent (in 2017) and we'd expect Chinese demand for iron ore to increase at a similar level."

China's vow this week to shut low-grade steel producers which use scrap metal by the end of June should help boost demand for iron ore, he added.

Iron ore prices soared 80 percent in 2016 to end a three-year losing streak as China's infrastructure investment push helped spur steel demand.

"If iron ore supply is available then it's going to go to China," said Driscoll.

Stocks of imported iron ore at major Chinese ports reached 116.7 million tonnes on Jan. 6, the highest since at least 2004, according to SteelHome consultancy.

Reporting by Josephine Mason and Manolo Serapio Jr.; Editing by Kenneth Maxwell and Joseph Radford

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