* Iron ore futures consolidate after recent rally
* Shanghai rebar near 4-1/2-month high (Updates prices)
By Manolo Serapio Jr
MANILA, Feb 17 (Reuters) - Spot iron ore stretched gains to hit fresh three-month highs as firmer Chinese steel prices encouraged producers to stock up on the raw material that has outperformed other industrial commodities so far this year.
The spot iron ore benchmark has gained more than 7 percent so far this year. In contrast, copper CMCU3 has lost 3 percent and Brent crude LCOc1 has fallen 14 percent.
Iron ore futures in Asia consolidated on Wednesday after a recent rally.
"I think there is some restocking to be done. Steel prices are firm, steel market looks good. It's not a very big surprise to me," a Shanghai-based iron ore trader said on the strength on the iron ore market.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI climbed 1.1 percent to $46.10 a tonne on Tuesday, the highest since Nov. 16, according to The Steel Index (TSI) which assesses prices.
Iron ore rallied 5.6 percent on Monday, its biggest single-day jump since July last year.
As the number of Chinese players returning to the market from last week's Lunar New Year holiday increased, so did fresh buying activity, TSI said, prompting sellers to raise offers for spot cargoes.
The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 touched a four-month high of 343.50 yuan ($52.65) a tonne on Wednesday, before closing flat at 339 yuan.
On the Singapore Exchange, March iron ore SZZFH6 was steady at $44.25 a tonne.
On the Shanghai Futures Exchange, construction-used rebar SRBcv1 slipped 0.5 percent to end at 1,861 yuan a tonne, not far behind Monday's 4-1/2-month peak of 1,880 yuan.
Iron ore could face resistance as the price nears $50 a tonne, the Shanghai trader said.
"We have to realise one thing - ultimately, supply is going to overwhelm everything," he said.
Amid excess global supply and slower demand from China, iron ore prices have tumbled more than 60 percent in the past two years.
ANZ Bank said increasing supply from Brazil - the world's No. 2 iron ore supplier after Australia - "is flattening the global cost curve for iron ore, putting downward pressure on the longer term, sustainable price".
Rebar and iron ore prices at 0712 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1861
-10.00
-0.53 DALIAN IRON ORE DCE DCIO MAY6
339
+0.00
+0.00 SGX IRON ORE FUTURES MAR
44.25
-0.02
-0.05 THE STEEL INDEX 62 PCT INDEX
46.1
+0.50
+1.10 METAL BULLETIN INDEX
46.78
+0.52
+1.12
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.5240 Chinese yuan)