* Shanghai rebar gains almost 2 pct
* Spot iron ore rises to near 1-mth high (Updates prices)
By Manolo Serapio Jr
MANILA, July 29 (Reuters) - Chinese iron ore futures climbed 4 percent to hit their upside limit on Wednesday, spurred by a recovery in steel prices that may be difficult to sustain amid shrinking demand in the world's top consumer.
Other China-traded commodities also gained broadly, including copper SCFcv1 and soybeans DSAcv1 , as equities bounced back after a three-session slide.
The most active January iron ore contract on the Dalian Commodity Exchange DCIOcv1 closed at the exchange-set ceiling of 369 yuan ($59) per tonne, a three-week high.
Firmer futures may stretch gains in benchmark spot iron ore prices. Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI rose 1.6 percent to $52.20 a tonne on Tuesday, its loftiest since July 3, according to The Steel Index.
The gains in iron ore followed a rebound in steel prices in China after a significant drop this year, said Wang Li, a consultant at CRU Group in Beijing.
Slow demand and tougher anti-pollution measures have prompted some Chinese mills to curb production, but Wang said the price recovery may not be sustained.
CRU estimates that apparent steel consumption in China fell by 16 million tonnes, or 4 percent, in January-June. The China Iron and Steel Association (CISA) says consumption dropped 4.7 percent in that period.
"For the third quarter, it's very hard to see an improvement in steel consumption because construction activity may not pick up," said Wang, citing a slowing economy and a weak housing market.
The most traded rebar for January delivery on the Shanghai Futures Exchange SRBcv1 rose 1.7 percent to end at 2,110 yuan a tonne, having fallen to an all-time low of 1,951 yuan earlier this month.
Amid plummeting demand, CISA said on Monday that 43 percent of its members had lost money in the first half of the year. ID:nL3N1072MP
"We expect the loss-making situation to continue for the rest of this year," said Wang.
Rebar and iron ore prices at 0702 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
2110
+36.00
+1.74 DALIAN IRON ORE DCE DCIO JAN6
369
+14.00
+3.94 SGX IRON ORE FUTURES SEP
50.4
+0.84
+1.69 THE STEEL INDEX 62 PCT INDEX
52.2
+0.80
+1.56 METAL BULLETIN INDEX
53.45
+1.10
+2.10
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.2088 Chinese yuan)