* Spot iron ore at $59.90/tonne, up more than 12 pct on week
* Shanghai rebar slips after surge to 11-month high (Updates prices)
MANILA, April 14 (Reuters) - Dalian iron ore futures pulled back from 17-month highs to finish lower on Thursday as steel prices retreated after rapid gains earlier this week.
Steep gains in iron ore futures in Dalian, the world’s most liquid derivatives market for the steelmaking commodity, helped to push the spot benchmark to near $60 a tonne.
The rally was fuelled by a surge in steel prices as demand picks up in China, the world’s top consumer and producer, with construction activity gaining steam. Shanghai rebar futures touched an 11-month high on Wednesday.
“Higher steel prices have pushed China’s blast furnace profitability to a one-year high, driving strong demand for seaborne iron ore lump,” ANZ Bank said in a note.
The most-traded September iron ore on the Dalian Commodity Exchange slipped 0.4 percent to close at 417.50 yuan ($64.37) a tonne, after earlier hitting 432 yuan, its loftiest since Nov. 5, 2014.
Major miners from Australia and Brazil were actively selling spot iron ore cargoes in the market this week, traders say, with prices of material stocked at Chinese ports also rising.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 2.4 percent to $59.90 a tonne on Wednesday, according to The Steel Index.
That was the highest for the spot benchmark since March 8 when it touched the 2016 high of $63.30. A breach of that level would lift the price to its strongest since June 2015.
Iron ore has gained more than 12 percent so far this week, lifting its year-to-date advance to nearly 40 percent.
Investment bank Barclays said profitability in China’s steel sector has improved significantly this year. “Based on a survey of 163 steel mills, only 32.52 percent are loss-making as of April 8, compared with over 80 percent in December 2015,” Barclays said.
But investors took profits in rebar futures on Thursday after this week’s rally. The price of construction-used rebar on the Shanghai Futures Exchange ended 1.8 percent lower at 2,324 yuan a tonne.
$1 = 6.4857 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Christian Schmollinger and Sunil Nair
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