* Shanghai rebar falls to new all-time low
* Spot iron ore at 10-year low, has lost 40 pct this year
* China official factory PMI at 3-year low (Recasts, adds details/quote, updates prices)
By Manolo Serapio Jr and Maytaal Angel
MANILA/LONDON, Dec 1 (Reuters) - Spot iron ore hit a new decade low on Tuesday as the glut-hit market for the steelmaking ingredient continued to struggle with poor demand from top consumer China, where Shanghai steel rebar prices sank to a record low.
Stocks of iron ore at China's ports climbed to 87.65 million tonnes on Nov. 27, the highest since May, data from SteelHome showed. SH-TOT-IRONINV
The port inventory has risen more than 10 percent since June, reflecting slow demand from Chinese steel producers, many of whom have curbed production as falling industrial demand widens their losses.
Top global iron ore miner Vale said earlier it expected to produce between 340 million and 350 million tonnes of iron ore in 2016, an amount that could increase to between 380 million and 400 million tonnes in 2017. urn:newsml:reuters.com:*:nE6N10I080
"Iron ore remains an oversupplied market where production costs are coming down, there's hardly anything that can stop prices from falling further," said Julius Baer analyst Carsten Menke.
"(Also) Beijing has ordered the closure of more than 2,000 factories because of increasing smog, and I wouldn't be surprised if this (includes) some steel plants," he added.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI fell 2.8 percent to $41.60 a tonne, the lowest on record at The Steel Index, which began assessing prices in 2008. Based on annual pricing that preceded the current spot-based system, it was the lowest since 2005.
Iron ore is down almost 40 percent this year.
On the Shanghai Futures Exchange, the most-traded May rebar contract SRBcv1 touched an all-time low of 1,618 yuan a tonne. It closed down 0.2 percent at 1,633 yuan.
"The misery in China's steel sector again affected the spot iron ore market, where buying appetite has all but disappeared," said TSI in a note.
China's steel consumption has been hit by a slowing economy.
Activity in China's manufacturing sector contracted to a three-year low in November, adding to signs of persistent economic sluggishness despite a flurry of stimulus measures. urn:newsml:reuters.com:*:nL3N13Q12B
Steel production in China, which accounts for about half of global output, will contract by an annual average of 1.4 percent between this year and 2019, Fitch Ratings' BMI Research said.
"Excess capacity will decrease as existing steel mills that are unable to afford the capital costs to upgrade non-compliant mills to meet emission controls, resource efficiency and safety standards, will close," BMI said in a report.
China's steel consumption shrank last year for the first time in more than 30 years and BMI expects the decline to continue through 2019.
Iron ore for May delivery on the Dalian Commodity Exchange DCIOcv1 fell 1.2 percent to close at 292.50 yuan ($46), after touching a near five-month low of 290.50 yuan. January iron ore on the Singapore Exchange SZZFF6 slid almost 2 percent to $38.70.
Rebar and iron ore prices at 0737 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1633
-4.00
-0.24 DALIAN IRON ORE DCE DCIO MAY6
292.5
-3.50
-1.18 SGX IRON ORE FUTURES JAN
38.70
-0.73
-1.85 THE STEEL INDEX 62 PCT INDEX
42.8
-0.70
-1.61 METAL BULLETIN INDEX
42.97
-1.53
-3.44
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3970 Chinese yuan)