* Goldman says 250 mln T of mines need to shut by 2018
* Spot iron ore still below $40/tonne
* Risks remain skewed to the downside - ANZ (Updates prices)
By Manolo Serapio Jr
MANILA, Dec 17 (Reuters) - Iron ore futures in China edged up on Thursday after a recent rout that pummelled prices to record lows, but the bearish sentiment still persists with Goldman Sachs (N:GS) cutting its price forecasts and warning that more mine closures are needed.
The steelmaking commodity has dropped 46 percent this year, outpacing copper and crude oil, amid a global glut and shrinking steel demand in top market China.
Iron ore for May delivery on the Dalian Commodity Exchange DCIOcv1 closed up 0.9 percent at 293 yuan ($45) a tonne, having touched a record low of 282.50 yuan last week.
On the Singapore Exchange, January iron ore SZZFF6 slipped 0.6 percent to $37.77 a tonne.
Some iron ore cargoes were sold to China at slightly higher prices than last week's spot levels, traders said, although private offers remained low in a bid to draw buyers.
Some Chinese mills that have been liquidating iron ore inventory may have pulled back and the reduction in short-term supply may have helped prop up prices, said Daniel Hynes, a commodity strategist with ANZ.
"For us the risks are still skewed to the downside. We're seeing continued weakness in the Chinese steel market," said Hynes.
Miners need to cut about 250 million tonnes of iron ore capacity, or 18 percent of current supply, over the next three years to balance the market, Goldman Sachs said as it lowered its price forecasts further.
Goldman slashed its price estimate for 2016 by 13 percent to $38 per tonne, analysts Christian Lelong and Amber Cai wrote in the report published on Wednesday. Iron ore will average $35 a tonne in 2017 and 2018, down 14 percent from earlier forecasts.
"We expect the pace of mine closures to accelerate in 2016 as producers with negative cash flow struggle to find alternative sources of funding," the analysts said. urn:newsml:reuters.com:*:nL3N1461R4
Benchmark 62-percent grade iron ore for delivery to China's Tianjin port .IO62-CNI=SI climbed nearly 2 percent to $38.20 a tonne on Wednesday, according to The Steel Index (TSI).
It touched $37 on Friday, the weakest level recorded by TSI since it began compiling data in 2008. Prior to TSI records and during the annual pricing era that preceded the spot-based system, that level was the lowest since 2005.
Rebar and iron ore prices at 0707 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1677
+14.00
+0.84 DALIAN IRON ORE DCE DCIO MAY6
293
+2.50
+0.86 SGX IRON ORE FUTURES JAN
37.77
-0.23
-0.61 THE STEEL INDEX 62 PCT INDEX
38.2
+0.70
+1.87 METAL BULLETIN INDEX
39.18
-0.18
-0.46
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.4818 Chinese yuan)