* First weekly decline after 4 weeks of gains
* Port stocks, slower steel output in July hit iron ore demand (Updates close price)
SHANGHAI, July 22 (Reuters) - Chinese iron ore futures fell on Friday and posted a weekly loss of 4.5 percent, pressured by rising port inventories and falling steel prices in the world's top producer of the metal.
Dalian Commodity Exchange iron ore for September DCIOcv1 lost 1 percent to 428.5 yuan ($64.24) a tonne by close, after earlier rising more than 3 percent on a bump in spot prices on Thursday. The contract declined for the first week after four straight weeks of gains.
"Iron ore futures earlier tried to catch up with spot prices, but growing port inventories and slower demand due to falling steel output dampened prices," said Li Wenjing, an analyst with Industrial Futures in Shanghai.
Li said after taking taxes and port fees into account that iron ore futures were as much as $5 a tonne lower than spot.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 1.8 percent to $56.10 a tonne on Thursday from the previous day, according to The Steel Index.
Iron ore stockpiles at big Chinese ports CUS-STKTOT-IORE also climbed further, curtailing demand for inbound cargoes. By Friday, port iron ore inventories were at 107.1 million tonnes, up 1.5 percent on Friday from a week ago and the highest since September 2014, Custeel.com data showed.
Some support for iron ore prices came when Vale SA said it sees its full-year iron ore output coming in at the lower end of forecasts this year and below expectations in 2017.
Vale's iron ore output was 86.8 million tonnes in the second quarter, down 2.8 percent from a year earlier, the miner also said, a sign the No. 1 producer of the raw material is effectively reining in production at low-margin facilities. steel futures, October prices for benchmark rebar on the Shanghai Futures Exchange SRBcv1 dropped 1.8 percent to 2,310 yuan a tonne. Steel futures fell 6.8 percent for the week after four weeks of gains.
($1 = 6.6698 Chinese yuan)