* Dalian iron ore falls to weakest since July
* Shanghai rebar hits fresh record low
By Manolo Serapio Jr
MANILA, Nov 18 (Reuters) - Spot iron ore is on track to extend losses, approaching a seven-year low on prolonged worries over declining steel demand in China that has pushed ferrous futures deeper into the red.
Falling steel demand has prompted many loss-making Chinese producers to either cut output or shut capacity. Another mill located in China's top steel producing Hebei province may have shut, market sources say. urn:newsml:reuters.com:*:nL3N13C2BB
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI tumbled 3.2 percent to $45.80 a tonne on Tuesday, according to the Steel Index (TSI).
That was the lowest for the spot benchmark since July 8 when it touched $44.10, the weakest level since TSI began compiling data since late 2008.
"Prices remain under pressure with restocking delayed by Chinese buyers," ANZ Bank said in a note.
Weaker iron ore futures in China point to further declines in spot prices. The most-traded January iron ore on the Dalian Commodity Exchange DCIOcv1 fell to as much as 334.50 yuan ($52) a tonne, its lowest since July 9. It was down 2.3 percent at 335.50 yuan by midday.
The Baltic Exchange's main sea freight index .BADI , which tracks rates for ships carrying dry bulk commodities such as iron ore, fell to its weakest since an all-time low plumbed in February.
"Historically, we have seen a pick-up in freight rates from early November, but this year looks different," ANZ said.
Chinese construction activity is expected to slow during the seasonally weak winter period, curbing steel demand that has already dropped nearly 6 percent in the first 10 months of this year and likely to push prices of construction steel products such as rebar even lower.
The May rebar contract on the Shanghai Futures Exchange SRBcv1 touched a record low of 1,733 yuan a tonne and was last down 1 percent at 1,735 yuan.
There was little cheer from data showing that home prices in China rose for first time in over a year in October on an annual basis. In fact, in a sign of continued weakness in the housing market, month-on-month price gains were recorded in only 27 of the 70 cities tracked by China's statistics bureau, down from 39 in September. urn:newsml:reuters.com:*:nL3N13B2QS
"Looking ahead, more promotion towards year-end to boost cash flows may exert downward pressure on home prices on a month-on-month basis," Argonaut Securities analyst Helen Lau said.
Rebar and iron ore prices at 0340 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1735
-17.00
-0.97 DALIAN IRON ORE DCE DCIO JAN6
335.5
-8.00
-2.33 SGX IRON ORE FUTURES JAN
42.96
-0.27
-0.62 THE STEEL INDEX 62 PCT INDEX
45.8
-1.50
-3.17 METAL BULLETIN INDEX
45.58
-2.16
-4.52
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3825 Chinese yuan)