January 29, 2018 / 7:29 AM / 6 months ago

UPDATE 1-China iron ore hits one-month low on softer demand

* Iron ore at China ports drop, but still near record

* Coking coal futures down 1.8 pct, rebar flat (Updates prices, adds poll)

By Manolo Serapio Jr

MANILA, Jan 29 (Reuters) - Chinese iron ore futures fell to their weakest level in a month on Monday as demand for the steelmaking commodity remained slow in the world’s top buyer, keeping stocks at its ports near a record high.

Arrivals in China were also sustained by a lack of weather interruptions to shipments from top iron ore suppliers Australia and Brazil, which can be common at this time of the year.

“Exports from Australia and Brazil are usually impacted by weather related issues in the first couple of months of the year; however, so far there has been little disruption,” ANZ analysts said in a note.

Iron ore for May delivery on the Dalian Commodity Exchange closed down 1.3 percent at 514.50 yuan ($81) a tonne, after earlier hitting 511 yuan, the lowest since Dec. 28.

The volume of imported iron ore at China’s major ports dropped for the first time in 15 weeks, although the level was not far below a record high. SH-TOT-IRONINV

Port inventory fell 1.3 million tonnes to 153.13 million tonnes on Jan. 26, according to SteelHome consultancy. The week before, the stocks reached 154.43 million tonnes, the most since SteelHome began tracking it in 2004, and could produce steel for 107 million cars.

There are signs that the physical market in China is starting to soften, ANZ said.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB dropped 0.9 percent to $74.40 a tonne on Friday, according to Metal Bulletin, with the spot benchmark losing 3 percent in the past week.

Iron ore is forecast to average $62 a tonne this year, down from around $71 in 2017 on plentiful supply and potentially reduced profits at Chinese steelmakers, a Reuters poll showed.

Fellow steelmaking raw material coking coal also eased on Monday, with Dalian futures ending down 1.8 percent at 1,286.50 yuan a tonne. Coke slipped 0.8 percent to 2,032.50 yuan.

The most-active rebar on the Shanghai Futures Exchange was little changed at 3,945 yuan per tonne.

$1 = 6.3225 Chinese yuan Reporting by Manolo Serapio Jr.; editing by Richard Pullin

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