* Limited high-grade iron ore supply at China's ports -trader
* Spot iron ore on track for sixth straight weekly gain
By Manolo Serapio Jr
MANILA, Aug 18 (Reuters) - China's iron ore futures edged higher on Friday, with steelmakers eyeing high-grade ore to boost output and continue cashing in on firm demand for the building material in the world's top producer.
"It's a little hard to buy high-grade iron ore at the ports," said an iron ore trader in China's port city of Rizhao.
"Supply is still the same as in the past month, but the demand for high-grade is increasing."
The most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 was up 0.8 percent at 549 yuan ($82) a tonne by 0208 GMT, adding to a nearly 6-percent spike on Thursday.
Stockpiles of imported iron ore at China's ports dropped to 137 million tonnes last week from 139.15 million tonnes the previous week, according to data tracked by SteelHome. SH-TOT-IRONINV
While not far below the record 141.45 million tonnes reached in June, only about a fifth of that inventory is comprised of the high-quality Australian iron ore fines that many Chinese mills prefer, said the Rizhao trader.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB jumped 3.3 percent to $75.41 a tonne on Thursday, according to Metal Bulletin. The spot benchmark was up slightly for the week, and could be on course for a sixth consecutive weekly increase.
The most-active rebar on the Shanghai Futures Exchange SRBcv1 was little changed at 3,797 yuan a tonne.
The construction steel product has retreated from last week's 4-1/2-year peak of 4,016 yuan as the Shanghai bourse increased trading charges to tame speculative trading.
But falling steel inventories at Chinese traders show demand remained firm.
Stockpiles of rebar stood at 3.78 million tonnes as of Aug. 11, less than half of this year's peak of 8.4 million tonnes reached in February, according to SteelHome consultancy. SH-TOT-RBARINV
($1 = 6.6767 Chinese yuan)