* Spot iron ore lowest since Oct, down 24 pct this year
* Shanghai rebar rises 1 pct
* Fortescue to refinance $1 bln debt amid falling iron ore prices (Adds Fortescue, updates prices)
By Manolo Serapio Jr
MANILA, May 9 (Reuters) - Chinese iron ore futures fell nearly 1 percent on Tuesday, dropping for a fourth session in five, amid soft demand for the steelmaking raw material.
With steel consumption weaker than expected in China, the world's top consumer, some mills are opting for lower grade iron ore cargoes, said a trader in Shanghai.
"Some mills are losing money so they want to control their cost and they're buying lower grade iron ore. They also don't want big output of steel," the trader said.
The most-traded iron ore on the Dalian Commodity Exchange DCIOcv1 closed down 0.9 percent at 466 yuan ($68) a tonne, not far off the day's trough of 458 yuan.
Stocks of imported iron ore at 46 Chinese ports rose to 131.95 million tonnes on Friday, up 1.4 million tonnes from a week ago, according to SteelHome. The stockpiles hit 132.45 million tonnes in March, the most since SteelHome began tracking it in 2004. SH-TOT-IRONINV
Further weakness in futures could drag down spot iron ore prices further.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 2.6 percent to $60.15 a tonne on Monday, the lowest since October 2016, according to Metal Bulletin.
The spot benchmark, which hit a 30-month peak of $94.86 in February, has fallen almost 24 percent this year.
"Investors (have) yet to see any signs of the spot iron ore price establishing a base," Ric Spooner, chief market analyst at CMC Markets, said in a note.
Australian miner Fortescue Metals Group FMG.AX launched a $1 billion bond offering aimed at U.S. investors on Tuesday, as it seeks to refinance debt in the face of retreating iron prices. most-active rebar on the Shanghai Futures Exchange SRBcv1 rose 1 percent to close at 3,016 yuan a tonne after climbing 2.5 percent at Monday's close. ($1 = 6.9052 Chinese yuan)