* China steel output shrinks again in Nov, down 2.2 pct in Jan-Nov
* Spot iron ore dropped to $37 on Friday, lowest under spot system
* Iron ore stocks at China ports at seven-month high
By Manolo Serapio Jr
MANILA, Dec 14 (Reuters) - Iron ore futures in China and Singapore edged higher on Monday after recent sharp losses although the gains could be fleeting as investors remain cautious toward raw material demand amid slowing Chinese steel output.
Production of steel in China, which accounts for about half the world's output, dropped last month 1.6 percent versus a year ago, putting the January-November total down 2.2 percent to 738.4 million tonnes, according to data released on Saturday. urn:newsml:reuters.com:*:nL3N14106T
China's weak output of industrial commodities, including coal, stands in contrast to the strength in the overall economy. Factory production jumped to a five-month high and retail sales roes the most this year, the government data showed on Saturday. urn:newsml:reuters.com:*:nL3N13Z24G
Helen Lau, analyst at Argonaut Securities in Hong Kong, said firm Chinese industrial production and fixed-asset investment in November "pointed to signs of long-awaited stabilization."
Iron ore for May delivery on the Dalian Commodity Exchange DCIOcv1 was up 1.8 percent at 290.50 yuan ($45) a tonne by 0314 GMT after touching a record low of 282.50 yuan last week.
On the Singapore Exchange, January iron ore SZZFF6 rose 1 percent to $36.80 a tonne.
Rebar, a construction steel product, gained 0.8 percent at 1,664 yuan a tonne on the Shanghai Futures Exchange SRBcv1 after dropping to an all-time low of 1,618 yuan on Dec. 1.
Other industrial commodities traded in China also climbed, including base metals, led by a more than 2 percent spike in copper SCFcv1 after a recent selloff.
Today's gains in prices are counter to the prevailing negative sentiment in the market due to high iron ore inventories and falling demand for steel in China. Some Chinese producers have shut and more are seen going under with no near-term recovery seen. urn:newsml:reuters.com:*:nL3N13C2BB
Stocks of imported iron ore at China's ports grew further to 90.45 million tonnes on Friday, the highest since May, according to data tracked by consultancy SteelHome, reflecting slow demand.
"The physical market is quite bad," said an iron ore trader in Shanghai. "Steel sales are very poor and mills are struggling. There is enough inventory at ports and mills have credit issues because it's the end of the year and it's been a very, very bad year."
Benchmark 62-percent grade iron ore for shipment to China's Tianjin port .IO62-CNI=SI slid 1.3 percent to $37 a tonne on Friday, data compiled by The Steel Index (TSI).
It was the lowest recorded by TSI which began assessing prices in 2008. Under the annual pricing system that preceded TSI's records and spot pricing, it was the lowest since 2005.
The spot benchmark lost 6 percent last week, its eighth decline in nine weeks.
Rebar and iron ore prices at 0314 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1664
+13.00
+0.79 DALIAN IRON ORE DCE DCIO MAY6
290.5
+5.00
+1.75 SGX IRON ORE FUTURES JAN
36.8
+0.37
+1.02 THE STEEL INDEX 62 PCT INDEX
37
-0.50
-1.33 METAL BULLETIN INDEX
38.3
-0.22
-0.57
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.4587 Chinese yuan)