* Spot iron ore at 3-month low after 10-day losing run
* Dalian ore futures drop, Shanghai rebar near record low (Updates futures)
By Manolo Serapio Jr
MANILA, Oct 27 (Reuters) - Iron ore fell towards $50 a tonne and looked on track to stretch losses after Dalian futures dropped further on Tuesday as Chinese steel producers curb output in response to slow demand.
Output in China's top steel producing Hebei province fell 2.5 percent in September and stockpiles of iron ore at the country's ports climbed to the highest since May. urn:newsml:reuters.com:*:nL3N12F3AH
"People are bearish on steel demand for the rest of this year and production cuts will continue so that puts pressure on iron ore prices," said Wang Li, analyst at CRU Group in Beijing.
Benchmark 62-percent grade iron ore delivered to China's Tianjin port .IO62-CNI=SI slipped 0.2 percent to $50.80 a tonne on Tuesday, marking a 10th consecutive day of decline, according to The Steel Index (TSI).
That was the lowest for the spot price since July 24 and puts it closer to this year's trough of $44.10 reached in July, its cheapest since TSI began compiling data in 2008.
There was further weakness in iron ore futures on Tuesday. The most-traded January contract on the Dalian Commodity Exchange DCIOcv1 closed 0.3 percent lower at 366.50 yuan ($58) a tonne after touching a four-week low of 361.50 yuan.
There has been limited buying interest for spot cargoes so far this week, including stocks at China's ports, traders said. Those port stocks climbed to 83.95 million tonnes on Oct. 23, the highest since late May, according to data tracked by consultancy SteelHome. SH-TOT-IRONINV
While shipments from top iron ore suppliers Australia and Brazil keep rising, apparent Chinese steel consumption in the year to September has fallen nearly 7 percent, said Goldman Sachs (N:GS) analyst Christian Lelong.
"On that basis, rising exports are sustainable only as long as Brazilian and Australian ore is displacing product at the high-end of the cost curve," Lelong said in a note published on Oct. 23.
"In our view, low prices must once again send the signal to shut down surplus capacity."
The most-active January rebar on the Shanghai Futures Exchange SRBcv1 edged up 0.2 percent to end at 1,804 yuan a tonne. It touched a record low of 1,781 yuan on Friday.
Rebar and iron ore prices at 0708 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1804
+3.00
+0.17 DALIAN IRON ORE DCE DCIO JAN6
366.5
-1.00
-0.27 SGX IRON ORE FUTURES
46.40
-0.04
-0.09 THE STEEL INDEX 62 PCT INDEX
50.8
-0.10
-0.20 METAL BULLETIN INDEX
51.03
-0.59
-1.14
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3515 Chinese yuan)