* China industrial profits rise at fastest pace in six months
* Profits at Chinese steel companies surge 260 pct in April
* Iron ore off five-week low, but China port stocks weigh
By Manolo Serapio Jr
MANILA, May 28 (Reuters) - Shanghai steel futures rose to a one-week peak on Monday after data showing strong profits at steel producers helped boost overall earnings growth at China’s industrial firms to the quickest pace in six months.
Profits at Chinese industrial companies rose 22 percent in April from a year ago to 576 billion yuan ($90 billion), government data showed on Sunday, as profits at iron and steel processing firms surged 260 percent.
“The regained profit growth momentum reflects the strength in the economic fundamentals,” Argonaut Securities analyst Helen Lau said.
The most actively traded rebar for October delivery on the Shanghai Futures Exchange was up 0.3 percent at 3,594 yuan a tonne after earlier reaching 3,626 yuan.
A sustained drop in steel inventories from March had pointed to firm demand in China, the world’s top user and producer.
Stockpiles of construction steel product rebar at Chinese traders have fallen 38 percent from a five-year high in mid-March to 6.03 million tonnes in mid-May, data compiled by SteelHome consultancy showed. SH-TOT-RBARINV
Firmer steel futures had helped prices of steelmaking raw materials come off the session’s lows, although iron ore remained weak as inventories at China’s ports stayed near a record high.
The most-traded iron ore on the Dalian Commodity Exchange was down 0.9 percent at 454 yuan a tonne, but off a low of 448.50 yuan, its weakest since April 18.
Iron ore stocks at China’s major ports stood at 160.58 million tonnes on Friday, up 1.6 million tonnes from the previous week and not far from the record 161.68 million tonnes reached in April, SteelHome data showed. SH-TOT-IRONINV
“This did stoke fears that the continued strength in iron ore imports into China would add to this oversupply,” ANZ analysts said in a note.
Coking coal rose 0.5 percent to 1,199 yuan per tonne and coke eased 0.4 percent to 1,996 yuan.
$1 = 6.3909 Chinese yuan Reporting by Manolo Serapio Jr.; editing by Richard Pullin