* Iron ore up 1 pct after 20 pct spike on Monday
* Dalian iron ore futures climb a further 6 pct
* Shanghai rebar rises another 8 pct to hit upside limit
* China Feb iron ore imports rise 8 pct yr/yr (Releads, updates price)
By Manolo Serapio Jr
MANILA, March 8 (Reuters) - Iron ore rose by more than 1 percent to hit a fresh nine-month peak on Tuesday, a day after soaring nearly 20 percent, on expectations of a short-term boost in China's steel production.
The bullish market sentiment prevailed, with ferrous futures in China rising by their exchange-set limits, bringing iron ore's year-to-date gain to 46 percent, making it the best performing commodity for 2016.
Price gains were underpinned by forecasts for a jump in Chinese steel making, as producers see brisk seasonal demand.
"While the rally's hard to substantiate I can see a scenario where the market is pricing in a $60-tonne iron ore on the basis of a potential rise in steel production in China," said Daniel Hynes, commodity strategist at ANZ.
That increase may be supported by measures aimed at stimulating China's economy, Hynes said, although he expects the country's steel output to actually drop in 2016.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 1.1 percent to $63.30 per tonne, its strongest since June 15, according to data compiled by The Steel Index (TSI).
The 19.5 percent rally in the spot benchmark on Monday was its biggest gain since TSI began assessing prices in 2008.
The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 closed up 5.9 percent at the exchange-set ceiling of 423 yuan ($65) per tonne, its highest in a year.
On the Shanghai Futures Exchange, the most-active May rebar SRBcv1 closed up 8 percent at 2,194 yuan per tonne, also hitting its upside limit.
A 170,000-tonne cargo of Australian 62-percent grade Pilbara iron ore fines was sold at $64 per tonne on the globalORE platform on Tuesday, a dollar lower than on Monday.
"Some sellers are holding back and buyers are also not very willing to buy at high levels," said a Shanghai-based iron ore trader. "I think prices went up without a solid base."
May iron ore on the Singapore Exchange SZZFK6 slid 8.8 percent to $53.49 per tonne, after soaring more than 21 percent on Monday.
China's iron ore imports rose 8.3 percent to 73.61 million tonnes in February from a year ago, customs data showed, as top miners boosted shipments to gain more market share in the world's top consumer. with iron ore prices rising there is a chance we could see some of the Chinese domestic iron ore mines that have been closed for the past 12 months reopen, which could potentially result in some weakness in imports later this year," said ANZ's Hynes.
Top iron ore miners Vale VALE5.SA and Fortescue Metals Group FMG.AX said they are in talks that could see the Brazilian producer taking a minority stake in the Australian miner and the blending their iron ore to win market share in China. and iron ore prices at 1045 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
2194 +162.00
+7.97 DALIAN IRON ORE DCE DCIO MAY6
423
+23.50
+5.88 SGX IRON ORE FUTURES MAY
53.49
-5.17
-8.81 THE STEEL INDEX 62 PCT INDEX
63.3
+0.70
+1.12 METAL BULLETIN INDEX
63.63
-0.11
-0.17
Dalian iron ore and Shanghai rebar in yuan/tonne
($1 = 6.5055 Chinese yuan)
(Editing by Savio D'Souza and Alexander Smith)