* Shanghai rebar languishes near all-time low
* BHP sees sustained downward pressure on iron ore prices
* Fortescue eyes deeper cut in production cost (Adds Fortescue, updates prices)
By Manolo Serapio Jr
MANILA, Oct 15 (Reuters) - Spot iron ore prices fell to one-week lows and futures in China retreated on Thursday, reflecting weak sentiment amid a lack of signals that near-term demand from the world's top steel consumer would pick up.
BHP Billiton (L:BLT) BHP.AX , the world's No. 3 iron ore producer, expects more low-cost supply from Australia and Brazil for the remainder of the year that should continue to put prices under pressure. urn:newsml:reuters.com:*:nL8N12E2LD
"Fundamentals are weak, steel prices aren't really picking up, they're at poor levels. There's no reason for the market to spike," said an iron ore trader in Shanghai, on the outlook for the steelmaking ingredient.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI fell 1.1 percent to $54.30 a tonne on Wednesday, according to The Steel Index (TSI).
On Monday, the spot benchmark touched a two-week top of $55.70, soon after China returned from the Oct. 1-7 National Day holiday.
Bids for spot iron ore cargoes were low and slow, traders said, as weak steel pricing forces Chinese mills to limit stockpiles of the raw material.
China's steel demand has been shrinking in the face of a slowing economy, prompting more producers to sell overseas. In September, China's steel exports reached a record high of 11.25 million tonnes.
Prices for imported iron ore cargoes stockpiled at major ports in China slipped by 5 yuan per tonne, TSI said.
As prices continue to drop, Australia's Fortescue Metals Group FMG.AX , the world's fourth-biggest iron ore miner, is cutting costs more deeply. Chief Executive Nev Power said production cost should average around $15 per wet tonne of iron ore by year-end, compared with the $18 goal set in July. urn:newsml:reuters.com:*:nL3N12E62G
The most-traded January iron ore contract on the Dalian Commodity Exchange DCIOcv1 closed 0.7 percent lower at 374.50 yuan ($59) a tonne.
January rebar on the Shanghai Futures Exchange SRBcv1 ended flat at 1,834 yuan a tonne, not far above the 1,815 yuan trough it touched on Sept. 30 which was the lowest for a most-active contract since the bourse launched rebar futures in 2009.
Rebar and iron ore prices at 0703 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1834
+1.00
+0.05 DALIAN IRON ORE DCE DCIO JAN6
374.5
-2.50
-0.66 SGX IRON ORE FUTURES JAN
46.88
+0.10
+0.21 THE STEEL INDEX 62 PCT INDEX
54.3
-0.60
-1.09 METAL BULLETIN INDEX
55.12
+0.15
+0.27
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3454 Chinese yuan)