* Dalian iron ore futures extend losses
* Shanghai rebar up marginally (Updates Dalian futures)
By Manolo Serapio Jr
MANILA, Sept 16 (Reuters) - Spot iron ore prices slipped to one-week lows and futures in China extended losses on Wednesday due to thin buying interest among Chinese mills worried over slow steel demand.
Leading Chinese steelmaker Baoshan Iron and Steel 600019.SS (Baosteel) on Monday said it would keep its prices unchanged for October, suggesting demand will remain weak next month despite a seasonal upturn in construction activity. ID:nB9N11D028
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI fell nearly 2 percent to $56.40 a tonne on Tuesday, a level last seen on Sept. 8, data compiled by the Steel Index showed.
The spot benchmark touched a 10-week high of $58.50 last week, but buying interest in China, which imports two-thirds of the world's iron ore, has stalled.
"We've started to buy for October, but we're not chasing very high premiums," said a Shanghai-based trader. Premiums for Australian Pilbara iron ore fines are currently between $3 and $3.50 per tonne, he said.
"If you buy at these numbers, it will be tough to resell."
Chinese futures extended losses on Wednesday, with the most-traded January iron ore on the Dalian Commodity Exchange DCIOcv1 closing 0.4 percent lower at 397 yuan ($62) a tonne, after touching a one-week trough of 391 yuan. The contract dropped more than 3 percent on Tuesday.
Spot prices of steel billet in China's key Tangshan area recovered this week, although traders say demand remained generally soft.
Weak domestic demand has prompted many Chinese producers to sell more overseas, with exports rising 27 percent to 71.87 million tonnes in January-August.
That has forced producers elsewhere to cut prices to keep up with Chinese competition.
Tokyo Steel Manufacturing 5423.T , Japan's top electric arc furnace steelmaker, slashed its prices for the first time in almost a year, in response to exporters from China, South Korea and Taiwan that sell their products at a discount. ID:nL4N11L1S8
Even after the price cut, ANZ Bank said "the gap between Chinese and Japanese prices is as high as $120 per tonne".
Rebar and iron ore prices at 0703 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1934
+11.00
+0.57 DALIAN IRON ORE DCE DCIO JAN6
397
-1.50
-0.38 SGX IRON ORE FUTURES OCT
53.97
+1.06
+2.00 THE STEEL INDEX 62 PCT INDEX
56.4
-1.10
-1.91 METAL BULLETIN INDEX
57.28
-0.82
-1.41
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3697 Chinese yuan)