UPDATE 1-China May Iron Ore Imports down 6 pct, Steel Exports up

SHANGHAI, June 11 -- China's iron ore imports fell 6 percent to 51.9 million tonnes in May from the previous month, while steel product exports rose 15 percent from April.

Iron ore imports were 3 percent lower from a year earlier, but took the year-to-date imports to 262 million tonnes, up 8.4 percent versus a year earlier, Chinese customs said on Thursday.

Iron ore imports have started to fall after hitting an annual record of 59 million tonnes in March, while stagnant steel prices and possible large cutbacks in steel mill production could further squeeze imports over next few months.

"Most of the deals were signed in March or early April when prices were still high and buying was active, but orders have dramatically fallen in May after prices plummeted," said an iron ore trader based in Ningbo.

"The Indian monsoon will also have a big impact on iron ore imports in the summer."

Spot iron ore prices slumped by more than 25 percent from the all-time high of around $200 per tonne in late April.

Smaller Chinese steel mills and traders have spurned imported ore amid fluctuating steel prices as uncertainties in steel demand have continued to weigh on the market.

Imports are expected to fall sharply in June after a few Chinese steel mills brought forward maintenance plans to cut output as steel consumption by downstream sectors is expected to fall in the next few months.

Steel exports were 4.94 million tonnes in May, and reached 18 million tonnes for the first five months this year, surging by 127 percent versus last year, according to preliminary figures.

"Chinese steel exports still face many uncertainties from the European economy and possible export changes, so I am concerned about exports for the late half of this year," said Judy Zhu, an analyst with Standard Chartered Bank.