* Iron ore posts first weekly loss in five last week
* Limited downside risk seen for iron ore-analyst
SINGAPORE, Jan 23 (Reuters) - Spot iron ore prices may be little changed this week with top buyer China off for the Lunar New Year holiday, and stockpiles at Chinese ports more than enough to meet any immediate demand.Iron ore with 62 percent iron content .IO62-CNI=SI was nearly flat at $139.80 a tonne on Friday, according to Steel Index, ending 1.7 percent lower last week, its first weekly loss in five.
Demand for the steelmaking ingredient in the spot market thinned sharply last week as trading activity ground to a halt ahead of this week's holiday.Those seeking small cargoes this week can readily secure
material from Chinese ports, traders said, where stockpiles of imported iron ore stood at 98.41 million tonnes last week, up 1 percent from the previous week, data from industry consultancy Mysteel showed on Friday.
Traders are relatively optimistic iron ore prices, languishing near two-week lows, will rebound after the holiday, with steel prices gradually edging higher.The most-traded May rebar contract on the Shanghai Futures Exchange hit a three-month high on Friday, and finished last week up 2.2 percent, its biggest gain since early December."I don't see much downside risk for iron ore because China continues to produce steel and liquidity is improving although not significantly," said Henry Liu, head of commodity research at Mirae Asset Securities. At current steel and iron ore prices, Chinese producers of
long steel products still make a margin of 150-200 yuan per tonne ($24-32), said Liu.Data released on Saturday showed China diversified its spot iron ore buying away from India in 2011, largely in favour of
South Africa, but failed to reduce its dependence on term purchases from top suppliers Australia and Brazil.
China imported 64 percent of its iron ore from Australia and Brazil, unchanged from the year before, while iron ore purchases from India dropped by 24 percent, as exports from that country were curbed by policy restrictions.
Iron ore indexes
PLATTS 62 PCT INDEX 140.75 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 139.8 0.10 0.07
METAL BULLETIN INDEX 139.56 -0.15 -0.11
*Index in dollars/tonne, show close for the previous trading day
($1 = 6.3390 Chinese yuan)