The Boy Blues had won the highly-competitive end-of-season event three years running, but Valencia fielded an older side that included 19-year-olds in a final that the Spaniards won 2-0.
City, shorn of a clutch of young stars on international duty headed by Kieran Trippier, had topped their group courtesy of a nailbiting penalty shoot-out after a very physical Benidorm side held them 1-1.
Valencia snatched the lead 15 minutes into the final with a long-range effort that dipped over goalkeeper Eirik Johansen. Jack Redshaw - the tournament’s three-goal top scorer - had an equaliser disallowed before a poorly-defended corner cost City dear.
Academy manager Jim Cassell said: “Valencia were worthy winners, and the four games we played - against varying styles of football - represented a great education for the lads who played.
“They came up against some real rough and tumble stuff - one group game we weren’t involved in had seven players sent off - as well as the slick football that Valencia were able to play.”
Cassell drafted in impressive midfielder Freddy Vaseli, the Swiss schoolboy who had skippered his national team to the European Under-17 Championship semi-finals in Germany two weeks earlier.
The starting line-up against Valencia was: Eirik Johansen, Smith, Wabara, Carter, Cunningham, Elabdellaoui, Vaseli, Mitchell, Chantler, Guidetti, Redshaw.
Group results: Acero 0 City 3 (Redshaw, Mitchell, Paris), City 4 Javea 0 (Redshaw 2, Gaudetti, Chantler), Benidorm 1 City 1 (Ibrahim).
