* China Sept iron ore imports at 86.1 mln T, highest this year
* Weaker steel market remains a key risk - ANZ (Updates prices)
By Manolo Serapio Jr
MANILA, Oct 13 (Reuters) - Chinese iron ore futures bounced off session lows on Tuesday after data showed the country's imports of the commodity climbed in September, defying expectations for weaker demand from the world's top consumer along with soft steel consumption.
China's iron ore imports rose 16 percent from the previous month to 86.12 million tonnes in September, the highest this year, customs data showed. urn:newsml:reuters.com:*:nL3N12C2M3
The increased imports show "there's been no obvious decline yet in steel production" in China, despite mills losing money over falling prices, said Wang Li, analyst at CRU Group in Beijing.
"We also expect iron ore shipments from Australia to be higher in the fourth quarter because there's less disruption from cyclones. And with the current iron ore price, there's no reason for majors to cut supply."
Iron ore for January delivery on the Dalian Commodity Exchange DCIOcv1 closed down 1.7 percent at 376.50 yuan ($59.46) a tonne, but off a session trough of 371.50 yuan.
The pullback in Dalian futures followed sharp gains last week, as the Chinese returned from a week-long holiday, on expectations steel mills would replenish stockpiles.
But there has been limited deals in the physical market since the holidays ended. With winter in China approaching, steel demand is likely to take a further hit as construction activity slows.
"It's hard to see a recovery for steel when actual demand during winter is usually weak," said a Beijing-based trader.
The January rebar contract on the Shanghai Futures Exchange SRBcv1 slipped 0.9 percent to 1,838 yuan a tonne, not far above a record low of 1,815 yuan touched on Sept. 30, just before China's National Day break.
China's economy is tipped to grow at its slowest pace in 25 years in 2015, curbing demand for industrial commodities such as steel. Chinese steel consumption continued to shrink this year after falling for the first time in more than three decades last year.
There was more evidence of economic weakness in China with data showing overall imports falling 20.4 percent in September and exports down 3.7 percent. urn:newsml:reuters.com:*:nZZN07K901
Amid weaker domestic demand, China's steel exports hit a record high of 11.25 million tonnes in September. urn:newsml:reuters.com:*:nL3N12C2M3
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI gained 0.4 percent to $55.70 a tonne on Monday, its loftiest since Sept. 28, based on data compiled by the Steel Index.
"We maintain the recovery in iron ore prices will be short-lived, with a weakening domestic Chinese steel market the main concern," ANZ analysts said in a note.
Rebar and iron ore prices at 0720 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1838
-16.00
-0.86 DALIAN IRON ORE DCE DCIO JAN6
376.5
-6.50
-1.70 SGX IRON ORE FUTURES DEC
48.94
-0.31
-0.63 THE STEEL INDEX 62 PCT INDEX
55.7
+0.20
+0.36 METAL BULLETIN INDEX
56.61
+0.60
+1.07
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3323 Chinese yuan renminbi)