UPDATE 1-Australia Port Hedland May iron ore shipments up 15.5%

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SYDNEY, June 11 (Reuters) - Iron ore shipments from Australia's Port Hedland rose 15.5 percent in May as miner BHP Billiton Ltd (BLT.L) (BHP.AX) and smaller rival Fortescue Metals Group (FMG.AX) responded to Chinese demand.

Total iron ore shipments from the port, which handles the two miners' production from Western Australia's Pilbara region and is one of the country's two iron ore export ports, rose to 13.086 million tonnes in May from 11.328 million tonnes in April, port figures showed on Thursday.

The boost in monthly shipments comes as China's steel mills continue to push for a 40-50 percent cut in benchmark prices.

That would be bigger than the 33 percent for fines ore and 45 percent for higher quality lump ore that Japanese, South Korean and Taiwanese steelmakers have accepted from Rio Tinto (RIO.L) (RIO.AX).

Rio Tinto exports ore from Western Australia's Port Dampier in the same region as Port Hedland. Dampier Port Authority has not published shipping data since December when 7.006 million tonnes of iron ore were shipped from the port that month.

Imports of iron ore by China have surged in recent months as China's steel production approached an all time high, boosted by the country's fiscal stimulus package.

Falling spot prices have also made high cost Chinese iron ore mines uneconomical, increasing China's reliance on iron ore imports.

Exports of iron ore from Port Hedland to China in May rose to 10.286 million tonnes from 9.175 million tonnes in April.

Exports to Japan rose to 1.200 million tonnes from 787,243 tonnes, while those to South Korea increased to 1.303 million tonnes from 949,212 tonnes. Exports to Taiwan fell to 157,008 tonnes from 260,143 tonnes. ($1=A$1.24) (Reporting by Bruce Hextall)