MANILA: Iron ore futures rose on Friday, with the Dalian benchmark marking its biggest weekly gain since early-August, as shrinking steel inventories at mills in China encouraged traders of the steelmaking raw material to push prices higher.

Iron ore on China's Dalian Commodity Exchange, closed 1.7% higher at 887.50 yuan ($135.12) a tonne, advancing for a fifth straight day. It gained 6.9% for the week.

Stocks of five major finished steel products, including rebar, held by 184 Chinese mills monitored by Mysteel consultancy shrank over Nov. 12-18 by 3.6% on week to a fresh 10-month low of around 5 million tonnes.

Spot iron ore traded at $128 a tonne on Thursday, the highest since Sept. 15, according to SteelHome consultancy.

Iron ore on the Singapore Exchange climbed a modest 0.5% to $124.89 a tonne by 0704 GMT. It has gained 4.8% this week.

"The fundamentals of finished products continued to improve this week, but the speed of rebar destocking declined compared with the previous week," analysts at Sinosteel Futures in Beijing said in a note.

"What is worth noting in this week's data is the decline in apparent demand for rebar," they said, attributing such development to cold weather in northern China.

Construction activity in the world's top steel producer and consumer is expected to slow when the weather turns colder in the coming weeks.