* Spot iron ore at $59.90/tonne, up more than 12 pct on week
* Shanghai rebar slips after rally to 11-month high
By Manolo Serapio Jr
MANILA, April 14 (Reuters) - Dalian iron ore futures climbed to their highest level since late 2014 on Thursday, stretching this week's rally as stronger steel prices in China boosted buying interest in the raw material.
Iron ore futures in Dalian, the world's most liquid derivatives market for the steelmaking commodity, have surged 14 percent this week, helping to push the spot benchmark to near $60 a tonne.
The rally has been fuelled by a surge in steel prices as demand picks up in China, the world's top consumer and producer, with construction activity gaining steam. Shanghai rebar futures touched an 11-month high on Wednesday.
"Higher steel prices have pushed China's blast furnace profitability to a one-year high, driving strong demand for seaborne iron ore lump," ANZ Bank said in a note.
The most-traded September iron ore on the Dalian Commodity Exchange DCIOcv1 was up 2 percent at 427.50 yuan a tonne by 0314 GMT, after earlier hitting 432 yuan ($67), its loftiest since Nov. 5, 2014.
Major miners from Australia and Brazil were actively selling spot iron ore cargoes in the market this week, traders say, with prices of material stocked at Chinese ports also rising.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 2.4 percent to $59.90 a tonne on Wednesday, according to The Steel Index.
That was the highest for the spot benchmark since March 8 when it touched the 2016 high of $63.30. A breach of that level would lift the price to its strongest since June 2015.
Iron ore has gained more than 12 percent so far this week, lifting its year-to-date advance to nearly 40 percent.
Investment bank Barclays (LON:BARC) said profitability in China's steel sector has improved significantly this year. "Based on a survey of 163 steel mills, only 32.52 percent are loss-making as of April 8, compared with over 80 percent in December 2015," Barclays said.
The price of construction-used rebar on the Shanghai Futures Exchange SRBcv1 was off 0.7 percent at 2,349 yuan a tonne on Thursday, easing marginally after this week's rally that pushed it to an 11-month peak of 2,435 yuan on Wednesday.
($1 = 6.4818 Chinese yuan)