* Firmer iron ore futures suggest further gains for spot
* Dalian iron ore touches 3-month high
* Shanghai rebar gains, finds support at 1,800 yuan/T (Updates futures prices)
By Manolo Serapio Jr
MANILA, Feb 3 (Reuters) - Spot iron ore rose to one-month peaks, with firmer futures on Wednesday pointing to more gains ahead as higher Chinese steel prices encouraged buyers to stock up on the raw material before next week's Lunar New Year break.
Dalian iron ore futures rose to their highest since November. Shanghai steel futures also advanced, as prices found support around 1,800 yuan ($274) a tonne after a recent decline from a four-month high.
"If steel holds up I wouldn't be surprised to see iron ore even go to $50," said a Shanghai-based trader.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 1.4 percent to $43.10 a tonne on Tuesday, a level last seen on Jan. 4, data from the Steel Index shows.
The spot benchmark last reached $50 in late October, falling amid a global glut at a time when Chinese steel demand shrank due to a slowing economy.
"We're seeing cautious buyers, so we're seeing a slow and steady increase," said the trader. He said trading volumes in physical markets were low with many Chinese participants already out of the market ahead of the Feb. 8-12 Spring Festival.
Firmer iron ore futures suggest further gains for spot prices. The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 closed up 1.2 percent at 329 yuan a tonne after rising as high as 331 yuan, its loftiest since Nov. 2.
On the Singapore Exchange, March iron ore SZZFH6 jumped 1 percent to $42.91 a tonne by 0710 GMT.
ANZ Bank attributed iron ore's price increase to stabilising steel prices "as markets expect intervention from policy makers to boost growth".
"The slowdown in shipping from key (iron ore) producers in anticipation of weak activity has led to temporary market tightness," ANZ added.
The price of construction steel product rebar on the Shanghai Futures Exchange SRBcv1 ended 0.8 percent higher at 1,826 yuan a tonne. The most-active contract recovered from Tuesday's low of 1,801 yuan, and moved closer to the four-month high of 1,871 yuan reached on Jan. 27.
Rebar and iron ore prices at 0710 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1826
+14.00
+0.77 DALIAN IRON ORE DCE DCIO MAY6
329
+4.00
+1.23 SGX IRON ORE FUTURES MAR
42.91
+0.44
+1.04 THE STEEL INDEX 62 PCT INDEX
43.1
+0.60
+1.41 METAL BULLETIN INDEX
43.84
+0.82
+1.91
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.5785 Chinese yuan)