* Shanghai steel not far above a record low
* Some Chinese mills opting for forward ore cargoes - trader
By Manolo Serapio Jr
MANILA, Aug 27 (Reuters) - Spot iron ore prices dropped to their lowest in nearly a month, under pressure from a weaker steel market in top consumer China that plunged Shanghai steel futures to a record low this week.
Traders were not confident that a seasonal pickup in Chinese steel demand next month would be strong enough to sharply revive prices, and iron ore buyers were reluctant to buy spot cargoes.
An upcoming big parade in Beijing has halted or limited operations of heavy industries in nearby areas including in top steel producing province Hebei, also curbing demand for iron ore. The Sept. 3 military parade will commemorate the 70th anniversary of the end of World War Two.
"Some mills are buying forward cargoes based on floating prices plus some premium instead of fixed pricing," said a Shanghai-based iron ore trader.
Iron ore for immediate delivery to China's Tianjin port slipped 0.4 percent to $53.10 a tonne on Wednesday, the lowest since July 31, according to The Steel Index.
The spot benchmark has given up almost 6 percent since touching a five-week high above $56 in early August, but still well above July's decade-low of $44.10.
On Thursday, the most-traded January rebar on the Shanghai Futures Exchange was up 0.7 percent at 1,967 yuan ($310) a tonne by midday, having fallen to an all-time low of 1,917 yuan on Tuesday.
China's steel consumption usually picks up in September along with construction activity after a summer lull. But traders say a slowing economy could limit any pick-up.
Concerns over the fate of the Chinese economy heightened this week after a dive in China's stock markets fueled a global rout. By Thursday, equities and commodities regained some lost ground as Chinese shares recovered.
On the supply side, growth is "looking soft" amid weaker capesize iron ore ship-charter rates, ANZ Bank said in a note.
Charter rates for the Western Australia-China route .BAWB dropped to $4.37 a tonne on Wednesday, the lowest since mid-April.
"Supply from Australia is also looking weak in August after strong supply growth in July," ANZ said. Australia is the world's top iron ore exporter.
That should provide a floor to iron ore prices that have been hit since last year by worries over a global glut.
Rebar and iron ore prices at 0404 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1967
+14.00
+0.72 DALIAN IRON ORE DCE DCIO JAN6
369
+2.50
+0.68 SGX IRON ORE FUTURES SEP
50.85
+1.04
+2.09 THE STEEL INDEX 62 PCT INDEX
53.1
-0.20
-0.38 METAL BULLETIN INDEX
53.67
+0.22
+0.41
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.4093 Chinese yuan)