* Sustained drop in traders’ steel inventories from mid-March
* China says open to trade negotiations with United States
By Manolo Serapio Jr
MANILA, April 27 (Reuters) - Chinese steel futures edged higher on Friday and were on track for their biggest weekly gain in nearly five months, spurred by firm construction demand in the world’s top user of the building material.
Supporting investor sentiment, China said it is open to negotiating with the United States to resolve trade tensions, noting that the countries should manage their conflicts through dialogue.
The most-active October rebar contract on the Shanghai Futures Exchange was up 0.7 percent at 3,589 yuan ($567) a tonne by 0215 GMT. The construction steel product hit 3,613 yuan on Thursday, its highest in seven weeks.
The benchmark contract has risen 3.3 percent so far this week, its biggest such gain since early December.
Rebar inventory at Chinese traders have dropped 21 percent from a five-year high in mid-March to 7.69 million tonnes on April 20, data compiled by SteelHome consultancy showed. SH-TOT-RBARINV
“Steel inventory, especially long products inventory, has fallen steadily in the past month due to healthy demand in the peak season,” Morgan Stanley analysts said in a note.
China’s state media Xinhua quoted Premier Li Keqiang as saying he hoped Beijing and Washington would be able to “manage and control” their differences.
U.S. President Donald Trump has threatened a new round of tariffs on $100 billion worth of Chinese products that could target mobile phones, computers and other consumer goods. China retaliated against an initial round of U.S. tariffs on $50 billion in Chinese exports.
The most-traded September iron ore on the Dalian Commodity Exchange rose 0.3 percent to 468 yuan a tonne. Coke gained 0.2 percent to 1,921.50 yuan and coking coal was steady at 1,170 yuan.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB was little changed at $66.28 a tonne on Thursday, according to Metal Bulletin. The spot benchmark has lost more than 1 percent so far this week, following a two-week advance.
$1 = 6.3348 Chinese yuan Reporting by Manolo Serapio Jr., Editing by Sherry Jacob-Phillips