* China factory activity rises for first time in 9 months
* Spot iron ore set for biggest weekly fall this year
By Manolo Serapio Jr
MANILA, April 1 (Reuters) - Ferrous futures in China advanced on Friday after data showed that activity in the country's vast factory sector has expanded for the first time in nine months.
However, slow buying activity in China's physical iron ore market has weighed on spot prices, with the steelmaking raw material on course for its biggest weekly drop this year.
China's manufacturing activity unexpectedly expanded in March for the first time in nine months, an official survey showed, adding to hopes that downward pressure on the world's second-largest economy is easing. see signs of recovery, more than stabilization, in China's economy after seasonal weakness in February. This came faster than our expectation," said Argonaut Securities Helen Lau.
That could boost the outlook for steel demand in the world's top consumer, which showed signs of strength this year, as Shanghai steel futures scaled a nine-month high last week.
Rebar, a construction steel product, was up 2.2 percent at 2,169 yuan ($336) a tonne on the Shanghai Futures Exchange SRBcv1 by 0311 GMT.
On the Dalian Commodity Exchange, September iron ore DCIOcv1 rose 1.2 percent to 383 yuan a tonne.
Appetite for physical iron ore cargoes was slow this week in China, pulling prices down 16 percent from their peak in March.
"The seaborne iron ore price continued to decline in the absence of any concrete policy measures by the Chinese government," ANZ Bank said in a note.
"However, the recent rebound in prices raise the risk of other high cost supply remaining in the market."
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI was flat at $53.20 a tonne on Thursday, according to The Steel Index. It was down 4.1 percent for the week so far.
The spot benchmark has fallen from a near nine-month peak of $63.30 that reached on March 8, but still ended the first quarter with a gain of 24 percent.
That made iron ore the top performing commodity, far outpacing gold, which logged its best quarter since 1986.
($1 = 6.4644 Chinese yuan)