* Dalian iron ore gains for third week in a row
* Disruptions at Tianjin port after blasts also aided prices (Updates prices)
By Ruby Lian and David Stanway
SHANGHAI, Aug 14 (Reuters) - Chinese iron ore futures hovered near five-week highs on Friday and posted their third straight weekly gain amid increased restocking by steel mills in the world's top consumer.
Chinese steel mills have stepped up purchases of the steelmaking ingredient after running down inventories as they lift output ahead of planned production curbs in late August.
"Spot prices are firm as mills are restocking, while the supply glut does not seem as serious as the market expected earlier after many small high-cost iron ore miners shut down," said Xia Junyan, an analyst with Everbright Futures in Shanghai.
The most traded January iron ore contract on the Dalian Commodity Exchange DCIOcv1 closed nearly flat at 385 yuan ($60) a tonne, not far from Thursday's peak of 388.50 yuan, the highest since July 6. It gained almost 4 percent for the week.
Spot iron ore prices also got a temporary lift from disruptions at Tianjin port after two massive explosions. BHP Billiton's BHP.AX said its iron ore operations at the port have been affected. ID:nL3N10O6CB ID:nL3N10O6HP
Iron ore for immediate delivery to the Tianjin port .IO62-CNI=SI edged up 0.7 percent to $56.20 a tonne on Thursday, according to The Steel Index. The spot benchmark hit a one-month high of $56.40 last week.
Separately, Shanghai rebar futures on the Shanghai Futures Exchange SRBcv1 closed 0.2 percent lower at 2,085 yuan a tonne.
Steel mills in regions around the capital Beijing are expected to cut output for a celebration of the end of World War Two between late August and early September.
Rebar and iron ore prices at 0707 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
2085
-4.00
-0.19 DALIAN IRON ORE DCE DCIO JAN6
385
+0.50
+0.13 SGX IRON ORE FUTURES SEP
52.82
+0.07
+0.13 THE STEEL INDEX 62 PCT INDEX
56.2
+0.40
+0.72 METAL BULLETIN INDEX
57.02
+0.71
+1.26
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3980 Chinese yuan) (Editing by Richard Pullin and Sunil Nair)