September 26, 2014 / 4:39 AM / 4 years ago

Iron ore heads for 7th weekly loss as glut drags

* Spot iron ore at 5-yr low, down 41 pct this year
    * Rebar, iron ore futures bounce back from record lows

    By Manolo Serapio Jr
    SINGAPORE, Sept 26 (Reuters) - Iron ore is on track to
extend its losing run to a seventh straight week after falling
to fresh five-year lows as supply continued to outstrip demand
in China, the biggest buyer of the steelmaking commodity.
    Chinese rebar steel futures rebounded from a record low on
Friday, but were also on course for a seventh consecutive weekly
drop on weak consumption that has bloated domestic supply.
    Iron ore for immediate delivery to China .IO62-CNI=SI
declined 1 percent to $78.60 a tonne on Thursday, the lowest
since September 2009, according to data compiled by The Steel
Index (TSI).
    "The mood in the iron ore market continues to darken, with
financing and performance becoming increasingly problematic for
some participants, particularly with the Chinese holidays
approaching," TSI said in a note.
    Chinese steel mills were barely replenishing stocks of iron
ore ahead of a week-long National Day break that starts from
Oct. 1, traders said.
    "There are not many enquiries coming in," said an iron ore
trader in Shanghai.
    "Why will they restock? There's plenty of cargo available
and the market is dropping everyday so it doesn't make sense to
restock now."
    Iron ore, the top revenue earner for global miners Vale
 and Rio Tinto , has fallen almost 4
percent this week and more than 41 percent this year.
    Amid slower steel consumption, iron ore supply exceeded
demand in China by 81 million tonnes over January to August,
Wang Xiaoqi, vice chairman of the China Iron and Steel
Association (CISA) said on Thursday.
    Chinese rebar futures rebounded after again falling to 2,538
yuan ($414) a tonne, matching Thursday's trough which was the
lowest for a most-active contract since the Shanghai Futures
Exchange launched the product in March 2009.
    The most-traded January rebar was up 1 percent at 2,609 yuan
a tonne by midday.
    But rebar, a construction steel product, was still down 4.4
percent for the week, on track for its steepest drop since
February 2013 after hefty losses earlier in the week.
    China's apparent crude steel consumption dropped this year
for the first time since at least 2000 amid a slowing economy
and CISA's Wang said he expected the production pace to ease for
the rest of 2014. 
    Iron ore for January delivery on the Dalian Commodity
Exchange climbed 1.4 percent to 563 yuan per tonne,
after falling to a contract low of 548 yuan.
    
  Rebar and iron ore prices at 0405 GMT
                                                                                           
  Contract                          Last    Change   Pct Change
  SHFE REBAR JAN5                   2609    +26.00        +1.01
  DALIAN IRON ORE DCE DCIO JAN5      563     +8.00        +1.44
  SGX IRON ORE FUTURES OCT         78.94     +1.38        +1.78
  THE STEEL INDEX 62 PCT INDEX      78.6     -0.80        -1.01
  METAL BULLETIN INDEX             78.63     -1.27        -1.59
                                                                                           
                                                                                           
  Dalian iron ore and Shanghai rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 (1 US dollar = 6.1334 Chinese yuan)

 (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)
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