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China iron ore surges to record as Brazil shipments fall in June

* Dalian iron ore rises for fourth straight session

* H1 iron ore supply from Brazil, Australia seen lower - Westpac

* Steel retreats as cenback adviser says China may not need ‘big’ stimulus

MANILA, July 2 (Reuters) - Iron ore futures in China extended their record-smashing rally on Tuesday after data showed Brazil’s exports of the steelmaking input fell in June, raising worries about a sustained tightness in supply in the world’s top steel producer.

Shanghai steel futures, however, pulled back from multi-year peaks after a Chinese central bank adviser said the domestic economy would not need “very big” stimulus measures to prop up growth unless the trade war with the United States worsens.

The most-active September iron ore contract on the Dalian Commodity Exchange jumped as much as 4.6% in early trade to 894.5 yuan ($130.37) a tonne, its highest since the benchmark’s launch in 2013, and extending gains into a fourth session.

Major supplier Brazil exported 29.40 million tonnes of iron ore in June, compared with 29.83 million tonnes in May and 35.29 million tonnes a year earlier, government data released on Monday showed.

Lower shipments from Brazil and No. 1 supplier Australia, where miners have lowered their 2019 output and export estimates due to operational issues and bad weather, have fuelled a rally in Dalian iron ore futures and spot prices, which hit five-year highs on Monday.

Australia’s iron ore exports data for June “so far is less impressive”, analysts at Westpac Banking Corp said in a note.

Last month, mining giant Rio Tinto Ltd lowered its guidance on volumes of iron ore it expects to ship from the key Pilbara producing region in Australia for the third time since April, citing operational problems.

While Brazilian miner Vale SA brought one of its shuttered mines, Brucutu, back to full capacity late last month, Westpac analysts said the supply outlook for the year had not improved significantly.

“Our models point to combined exports from Brazil and Australia down 36mt (million tonnes) for the year to date versus last year,” they said.

“Given Rio’s guidance and the lags in Brazil, it will be some time indeed before increased global supply offset the current structural deficit in this market,” the analysts said.

Iron ore stocks at China's ports hit the lowest level since early 2017 last week, based on data tracked by SteelHome consultancy SH-TOT-IRONINV, amid reduced shipments from Brazil and Australia and increased demand from domestic steel mills.

Benchmark spot iron ore was at $119.70 a tonne as of Monday, the highest since early 2014, SteelHome data showed.

Other steelmaking inputs traded higher, with Dalian coking coal up as much as 1.3% at 1,410 yuan a tonne. Coke edged up 0.8% to 2,121 yuan.

Steel futures traded lower as hopes of higher demand faded after China central bank adviser Ma Jun said on Monday the possibility of keeping GDP growth over 6% this year was rather “big” if the trade war does not worsen.

“There should be no need to take very big, new stimulus measures,” he said.

The most-active October steel rebar contract on the Shanghai Futures Exchange fell as much as 2.1% to 4,023 yuan a tonne after nine straight sessions of gains, pulling away from a more than eight-year peak hit on Monday.

Hot rolled coil futures retreated from Monday’s record high, down as much as 2.7% to 3,882 yuan a tonne.

$1 = 6.8615 yuan Reporting by Enrico dela Cruz; Editing by Subhranshu Sahu