Fri, 25 Oct 07:39:00 GMT
* Shanghai rebar down for 8th week out of 10
* Slower steel market cutting Chinese spot iron ore demand
(Recasts lead, updates prices)
By Manolo Serapio Jr
SINGAPORE, Oct 25 (Reuters) - Shanghai steel futures fell to their lowest in almost four months on Friday, declining for the eighth week in 10 amid tepid demand.
The weakness in China's steel market has curbed buying interest in raw material iron ore, with Dalian futures dropping nearly 6 percent in their first week of trading.
The most briskly traded rebar contract for May delivery on the Shanghai Futures Exchange closed down 0.8 percent at 3,585 yuan ($590) a tonne, after hitting a low of 3,582 yuan, the weakest since June 27. It fell 1.3 percent for the week.
"It will be tough for steel prices to recover since China is entering the cold season, so there's less construction activity. We're also seeing weak demand for iron ore," said an iron ore trader in China's eastern Shandong province.
In a sign of slow demand, stockpiles of construction steel product rebar held by Chinese traders have been steady at 5.8 million tonnes over the past three weeks, according to data compiled by Bank of America Merrill Lynch.
At the Dalian Commodity Exchange, the most-traded May iron ore contract dropped 1.1 percent to close at 918 yuan a tonne.
It fell to 916 yuan on Thursday, its lowest since the bourse launched iron ore futures on Oct. 18. The contract fell 5.8 percent for the week.
"We have 300,000 tonnes of iron ore stocks and we're having great difficulty selling them even at the level of our cost because the market is really weak," said the Shandong-based trader.
Other traders have stopped quoting their cargoes in the spot market, hoping that would help stem the fall in prices, said a trader in Shanghai, adding market participants are looking forward to China's key Communist Party meeting in November for signals on economic reforms that could spur demand for steel and iron ore.
Spot iron ore prices are similarly soft, with prices down 0.7 percent this week. The benchmark 62-percent grade iron ore <.IO62-CNI=SI> rose a modest 0.2 percent to $133.50 a tonne on Thursday, after falling to a 1-1/2-week low on Wednesday, according to data compiled by Steel Index.
Shanghai rebar futures and iron ore indexes at 0704 GMT
Contract Last Change Pct Change
SHFE REBAR MAY4 3585 -29.00 -0.80
THE STEEL INDEX 62 PCT INDEX 133.5 +0.30 +0.23
METAL BULLETIN INDEX 133.95 +2.13 +1.62
Rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.0820 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Sunil Nair and Subhranshu Sahu)