* Goldman says 250 mln T of iron ore needs to be displaced
* Spot iron ore still below $40/tonne
* Risks remain skewed to the downside - ANZ
By Manolo Serapio Jr
MANILA, Dec 17 (Reuters) - Iron ore futures edged up on Thursday after a recent rout that pummelled prices to record lows, but the bearish sentiment persisted as Goldman Sachs (N:GS) cut its price forecasts, warning that the pace of mine closures would accelerate.
The steelmaking commodity has dropped 46 percent this year, outpacing copper and crude oil, amid a global glut and shrinking steel demand in top market China.
Iron ore for May delivery on the Dalian Commodity Exchange DCIOcv1 was up 1 percent at 293.50 yuan ($45) a tonne by 0321 GMT, having touched a record low of 282.50 yuan last week. March iron ore on the Singapore Exchange SZZFH6 gained 0.1 percent to $36.20.
Some iron ore cargoes were sold to China at slightly higher prices, traders said, although private offers remained low in a bid to draw buyers.
Some Chinese mills which have been liquidating some iron ore inventory may have pulled back and the reduction in short-term supply may have helped prop up prices, said Daniel Hynes, a commodity strategist with ANZ.
"For us the risks are still skewed to the downside. We're seeing continued weakness in the Chinese steel market," said Hynes.
Around 250 million tonnes of iron ore mining capacity, about 18 percent of the current supply, need to be displaced over the next three years, Goldman Sachs said as it cut its price forecasts further in light of the market's vicious fall.
Goldman slashed its price estimate for 2016 by 13 percent to $38 per tonne. It also lowered its 2017 and 2018 forecasts to $35 a tonne for each year, down 14 percent from previous projections.
"We expect the pace of mine closures to accelerate in 2016 as producers with negative cash flow struggle to find alternative sources of funding," Goldman Sachs analysts Christian Lelong and Amber Cai wrote in a report. urn:newsml:reuters.com:*:nL3N1461R4
Benchmark 62-percent grade iron ore for delivery to China's Tianjin port .IO62-CNI=SI climbed nearly 2 percent to $38.20 a tonne on Wednesday, according to The Steel Index (TSI).
It touched $37 on Friday, the weakest level recorded by TSI since it began compiling data in 2008. Prior to TSI records and during the annual pricing era that preceded the spot-based system, that level was the lowest since 2005.
Rebar and iron ore prices at 0321 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1686
+23.00
+1.38 DALIAN IRON ORE DCE DCIO MAY6
293.5
+3.00
+1.03 SGX IRON ORE FUTURES MAR
36.2
+0.05
+0.14 THE STEEL INDEX 62 PCT INDEX
38.2
+0.70
+1.87 METAL BULLETIN INDEX
39.18
-0.18
-0.46
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.4815 Chinese yuan)