* Dalian iron ore set for 5th weekly fall
* Singapore iron ore up a modest 0.4%
* Benchmark spot 62% iron ore at 5-mth low
By Enrico Dela Cruz
MANILA, Aug 23 (Reuters) - Chinese iron ore futures extended a rebound in early Friday trading from a steep selloff this week, but gains were limited by pessimism about demand prospects for the steelmaking ingredient.
The most-traded January 2020 iron ore on the Dalian Commodity Exchange rose as much as 2.5% to 606 yuan ($85.43) a tonne, recovering from a 10-week low hit on Thursday. It was up 2% by 0313 GMT, though on track to log its fifth straight weekly fall.
In the Singapore Exchange, the front-month September 2019 contract edged up 0.4% to $83.80 a tonne.
Dalian iron ore has slumped more than 20% in August, on track to log its worst month since March 2018 after eight consecutive months of gains, as concerns over supply eased while demand slowed.
Output cuts in highly-polluted steelmaking hubs in China and a slowdown in the domestic economy due to a bruising trade war with the United States have clouded the demand outlook for iron ore and other raw materials in the world’s top steel producer.
The steel production curbs are expected to continue and may even intensify ahead of China’s National Day celebrations in early October.
“We could see further weakness,” said analyst Edward Meir, commodity consultant at brokerage INTL FCStone in London.
“The gains we saw ... seem to be just a short-lived technical bounce, as a sense of unease still seems to linger over a number of markets ahead of the September 1st U.S. tariff imposition on the next tranche of Chinese exports,” he said.
* Benchmark 62% iron ore for delivery to China SH-CCN-IRNOR62, as assessed by SteelHome consultancy, was steady at $86.50 a tonne on Thursday, the lowest since March 29.
* Steel futures were also firmer on Friday, with the most-active rebar contract on the Shanghai Futures Exchange up 1.1% at 3,727 yuan a tonne. Hot-rolled coil edged up 0.6% to 3,732 yuan.
* Other steelmaking ingredients were mixed, with Dalian coking coal up 0.4% at 1,331 yuan a tonne, while coke edged down 0.2% to 1,948 yuan.
* China will accelerate the launch of coking coal, coke and iron ore options on the Dalian exchange in an effort to further enrich hedging tools, the state-backed Securities Times reported on Thursday.
* China’s central bank lowered its official yuan midpoint to a fresh 11-year low on Friday, but it was nowhere as weak as traders had expected.
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($1 = 7.0936 yuan)
Reporting by Enrico dela Cruz; Editing by Sriraj Kalluvila