* Shanghai rebar rises as much as 2.6 pct, Dalian ore steady
* Spot iron ore at new 10-year low below $42/tonne
* Vale says to cut 2016 capex by around a third
By Manolo Serapio Jr
MANILA, Dec 2 (Reuters) - Shanghai steel futures rose more than 1 percent to recover from a record low on Wednesday, but the sharp gains failed to spill over to Dalian iron ore amid persistent worries about weak demand from top consumer China.
Spot iron ore fell to a fresh 10-year low on Tuesday, falling to below $42 a tonne, down more than 40 percent over the past year as a global glut overwhelmed a market hit by shrinking Chinese steel demand.
"It appears that the iron ore market is in a super bear cycle," said Kelly Teoh, an iron ore derivatives broker at Clarksons Platou Futures in Singapore.
"Prices continue to remain weak and don't appear to have hit a bottom at the moment."
The most-traded May rebar on the Shanghai Futures Exchange SRBcv1 was up 1.6 percent at 1,656 yuan ($259) a tonne by 0326 GMT, off a high of 1,673 yuan. It touched 1,618 yuan on Tuesday, the weakest for a most-active contract since the bourse launched rebar futures in 2009.
On the Dalian Commodity Exchange, May iron ore DCIOcv1 gained 0.2 percent to 293.50 yuan a tonne, after hitting a near five-month trough of 288.50 yuan.
China's steel consumption fell 5.7 percent to 590.47 million tonnes in January-October, the China Iron and Steel Association said last month, forcing many loss-making producers to either curb output or shut permanently. urn:newsml:reuters.com:*:nL3N13C2BB urn:newsml:reuters.com:*:nL3N13C1XP
Amid weak demand, stocks of imported iron ore at China's ports rose last week to the highest since May at 87.65 million tonnes, data tracked by industry consultancy SteelHome showed. SH-TOT-IRONINV
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI fell 2.8 percent to $41.60 a tonne on Tuesday, according to The Steel Index (TSI).
It was the lowest since TSI began compiling data in 2008. Based on annual pricing that preceded the current spot-based system, it was the lowest since 2005.
The world's top iron ore producer Vale VALE5.SA VALE.N said on Tuesday it planned to cut capital investments by around a third to about $6 billion next year.
The miner also said November's deadly mining disaster in Brazil could cost it at least $443 million, but that it was too early to put a price tag on what it expects to be a long clean-up from the pollution caused by the dam burst. urn:newsml:reuters.com:*:nL1N13R015
Rebar and iron ore prices at 0326 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1656
+26.00
+1.60 DALIAN IRON ORE DCE DCIO MAY6
293.5
+0.50
+0.17 SGX IRON ORE FUTURES JAN
38.65
+0.69
+1.82 THE STEEL INDEX 62 PCT INDEX
41.6
-1.20
-2.80 METAL BULLETIN INDEX
42.24
-0.73
-1.70
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3971 Chinese yuan)