* Iron ore poised for more than 3 pct weekly gains
* Rebar slips but on track for best week since Dec
* China ramps up steel output, boosting iron ore demand
By Enrico Dela Cruz
MANILA, April 12 (Reuters) - Iron ore futures in China ticked higher on Friday, on track for their third consecutive weekly gain, as spot prices hovered near five-year highs amid increased demand from Chinese steelmakers and declining supplies from producers overseas.
Steel prices edged down but construction-used rebar is set to mark its biggest weekly jump since the first week of December 2018.
The most traded September 2019 iron ore on the Dalian Commodity Exchange was up 0.5 percent at 652 yuan ($96.99) a tonne by 0213 GMT, after rising as much as 2.2 percent in early trade. It has risen 3.7 percent so far this week.
Steel mills’ strong appetite for iron ore at a time the market is spooked by supply disruptions lifted China’s benchmark contract this week to the highest since 2013, when the world’s biggest steelmaker launched its futures market for the commodity.
The main price booster though is the decline in shipments of the steelmaking feedstock to China that have been flagged by top suppliers in Brazil and Australia, with some analysts now expecting a deficit this year.
The global iron ore market is facing a shortfall of around 34 million tonnes this year, according to Westpac Banking Corp.
The deficit was unseen before a fatal tailings dam collapse in January curtailed the operations of the world’s No. 1 iron ore miner Vale SA in Brazil.
Adding to concerns about the shortfall, a tropical cyclone in late March hit the operations of major iron ore producers in Australia, prompting them to lower their 2019 shipment estimates.
“Given that spot prices have exceeded our expectations to date, and the supply hit from Vale mine closures are larger than initially expected, our forecasts for iron ore have been revised,” Westpac said in a note.
Spot with 62 percent iron content is now likely to end the June quarter at $87 a tonne, from $85 previously, and end 2019 at $77 from the previous forecast of $75, it said.
The spot price for such grade SH-CCN-IRNOR62 was at $94.50 a tonne on Thursday, according to SteelHome consultancy.
The most-active rebar contract on the Shanghai Futures Exchange slipped 0.4 percent to 3,759 yuan a tonne in early trade, and was up 4.9 percent so far this week.
Hot rolled coil, used for cars and home appliances, was down 0.2 percent at 3,672 yuan.
Other steelmaking raw materials extended their losses, with coking coal down 0.5 percent at 1,307 yuan a tonne while coke dropped 0.7 percent to 1,992 yuan.
($1 = 6.7225 Chinese yuan)
Reporting by Enrico dela Cruz; Editing by Rashmi Aich