SHANGHAI: Spot prices for iron ore cargoes to China extended losses on Friday, putting the index on course for its biggest weekly fall since October 2011, with buying interest from Chinese steelmakers still low despite a slight recovery in rebar futures prices.

The price of iron ore with 62 per cent iron grade fell for the twelfth session in a row to $117.3 a tonne on Thursday, down 1.1 per cent from Wednesday. The index has already dropped 6.2 per cent this week.

“The majority of steel mills that I've spoken to remain pessimistic about the steel and iron ore market outlook in the near future, and a further fall to $110 a tonne isn't far away,” said an iron ore trader in the coastal city of Dalian.

Tepid demand and a cooling economy in China, the world's biggest buyer of the steelmaking raw material, would continue to put pressure on the revenues of miners including Rio Tinto , BHP Billiton  and Brazilian miner Vale, all of which have launched ambitious capacity expansion plans on the back of surging Chinese demand.

Vale's director of ferrous metals Jose Carlos Martins said he saw the floor price for iron ore at $120 a tonne and predicted the global iron ore market would rebound soon. The world's top iron ore miner posted its worst earnings results in two years on Thursday.  Chinese steel futures rose for the fourth straight session after tumbling to a record low on Monday, but investors and traders believe the recent gains would be short-lived, with summer demand traditionally weaker and Beijing's pro-economic growth measures unlikely to provide any immediate boost.

The most active rebar contract on the Shanghai Futures Exchange edged up to a one-week high of 3,768 yuan ($590) per tonne before closing at 3,762 yuan, up 1.16 per cent from the previous day. It was still within touching distance of a record low of 3,652 yuan hit on Monday.

“We can't see the recent gains as a signal for a rebound in the steel market as the physical market remains poor with prices still falling,” said a trader in Beijing.