* Spot iron ore up for a sixth week in seven
* Dalian iron ore at highest since June
* Hopes China will announce stimulus measures at NPC
By Manolo Serapio Jr
MANILA, March 4 (Reuters) - Iron ore scaled fresh four-month highs and is on course for its third consecutive weekly gain, buoyed by firmer steel prices in China and expectations that the government may launch more measures to stimulate the economy.
Iron ore futures jumped more than 2 percent on Friday, suggesting more gains may be in store for spot prices that have already risen over 20 percent this year to make the steelmaking raw material the top performing commodity.
There are expectations in the market that the Chinese government may introduce stimulus measures during the National People's Congress that kicks off on Saturday, said Wang Di, analyst at CRU Group in Beijing.
Around 3,000 delegates are expected at the annual meeting of China's parliament in Beijing where the top agenda this year is the new five-year plan, which will map out economic goals for the next five years. sentiment in the steel market is very positive as you can see from steel prices," said Wang, noting that Chinese steel prices have risen by about 400 yuan per tonne since after the Lunar New Year holiday in early February compared with a more modest 100-yuan gain in iron ore prices.
"More and more steel mills are making money compared with the bad profitability they had during the second half of last year. This has increased their demand for raw material," said Wang.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 0.2 percent to $51.70 a tonne on Thursday, the highest since Oct. 21, according to The Steel Index.
The spot benchmark has risen 5.5 percent so far for the week, its third weekly increase and sixth out of seven.
Those gains could extend as iron ore futures rallied further on Friday. The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 was up 2 percent at 392.50 yuan ($60.24) a tonne by midday after peaking at 394.50 yuan earlier, its highest since June 25.
Iron ore contracts on the Singapore Exchange 0#SZZF: also advanced.
On the Shanghai Futures Exchange, rebar steel SRBcv1 was off 0.4 percent at 1,975 yuan a tonne, not far below Tuesday's six-month top of 2,010 yuan.
Rebar and iron ore prices at 0407 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY
1975
-8.00
-0.40 DALIAN IRON ORE DCE DCIO MAY
392.5
+7.50
+1.95 SGX IRON ORE FUTURES MAY
47.9
+0.77
+1.63 THE STEEL INDEX 62 PCT INDEX
51.7
+0.10
+0.19 METAL BULLETIN INDEX
51.44
+1.82
+3.67
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.5155 Chinese yuan)