* Shanghai rebar languishes near record low on weak demand
* Spot iron ore on track for fourth monthly loss in five
* Big Chinese steel producers incur losses in Jan-Sept (Updates futures)
By Manolo Serapio Jr
MANILA, Oct 28 (Reuters) - Dalian iron ore futures fell more than 2 percent to a two-month low on Wednesday, pressured by weak steel prices in China that have led to hefty losses for many producers.
China's largest steel producers had combined losses of 28.12 billion yuan ($4.42 billion) in the first nine months of 2015, the China Iron and Steel Association (CISA) said. This is likely to force more production cuts in the sector. urn:newsml:reuters.com:*:nB9N12K00K
Apparent steel consumption in China, which produces about half of the world's steel, shrank nearly 6 percent in January-September, according to CISA, as the world's No. 2 economy slows.
Against the backdrop of weak Chinese steel demand and more supply coming into the market, the downside risk for iron ore prices remains, said Ric Spooner, analyst at CMC Markets in Sydney.
The most-active January iron ore on the Dalian Commodity Exchange DCIOcv1 closed down 1.9 percent at 358 yuan a tonne, after touching a low of 356.50 yuan earlier, its weakest since Aug. 25.
That puts more pressure on spot prices that have fallen almost 7 percent in October, on track for a fourth monthly drop in five.
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI was unchanged at $50.80 a tonne on Tuesday, after a 10-day losing streak, data from The Steel Index (TSI) showed.
That was the lowest for the spot benchmark since July 24, and within striking distance of this year's trough of $44.10, the lowest since TSI began compiling data in 2008.
"There is a chance that we would need to get down below $45 and stay there for a while in order to force further production cuts," said Spooner, referring to higher cost iron ore supply.
The most-traded January rebar on the Shanghai Futures Exchange SRBcv1 slipped 0.8 percent to end at 1,792 yuan a tonne, having hit 1,784 yuan earlier. The contract touched a record low of 1,781 yuan last week.
Rebar and iron ore prices at 0701 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1792
-14.00
-0.78 DALIAN IRON ORE DCE DCIO JAN6
358
-7.00
-1.92 SGX IRON ORE FUTURES DEC
45.61
-0.89
-1.91 THE STEEL INDEX 62 PCT INDEX
50.8
+0.00
+0.00 METAL BULLETIN INDEX
51.5
+0.47
+0.92
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3578 Chinese yuan)