* Iron ore at lowest in nearly three months
* Shanghai rebar languishes just above all-time low (Updates futures prices)
By Manolo Serapio Jr
MANILA, Oct 23 (Reuters) - Iron ore fell to its lowest since July and was on course to post a fifth weekly drop in six, pressured by weakening steel prices in China that have prompted mills to curb spending.
"No mills are in a hurry to buy. That's why the market for iron ore is bleak for those with cargo in hand," said an iron ore trader in Shanghai.
Prices for imported iron ore stocked at Chinese ports have dropped by 5 yuan per tonne "almost everyday this week," he said, underlining the lack of buying interest.
Stocks of iron ore at China's ports stood at 83.2 million tonnes as of Oct. 16, the highest since June, data tracked by consultancy SteelHome showed. SH-TOT-IRONINV
Benchmark 62-percent grade iron ore for delivery to China's Tianjin port .IO62-CNI=SI dropped 1 percent to $51.40 a tonne on Thursday, a level last seen on July 27, according to The Steel Index (TSI).
A breach of the $50 level would bring the steelmaking raw material closer to this year's low of $44.10 - hit in July - the weakest since TSI began compiling data in 2008. Iron ore has lost 2.3 percent so far for the week.
"The downtrend in seaborne iron ore prices is accelerating and Chinese steel mills are tightening their spending on the back of weak steel prices," ANZ analysts said in a note.
There has been little activity in the spot iron ore market this week, traders said, as steel prices keep falling.
The most-traded January rebar on the Shanghai Futures Exchange SRBcv1 closed down 0.4 percent at 1,801 yuan ($283) a tonne, not far above a record low of 1,788 yuan touched on Wednesday.
On the Dalian Commodity Exchange, January iron ore DCIOcv1 ended 1.1 percent higher at 370 yuan a tonne, recovering from a session low of 363.50 yuan.
Rebar and iron ore prices at 0712 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1801
-7.00
-0.39 DALIAN IRON ORE DCE DCIO JAN6
370
+4.00
+1.09 SGX IRON ORE FUTURES DEC
46.39
-0.16
-0.34 THE STEEL INDEX 62 PCT INDEX
51.4
-0.50
-0.96 METAL BULLETIN INDEX
52.18
-0.61
-1.16
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3548 Chinese yuan) (Editing by Tom Hogue and Biju Dwarakanath)