* Spot iron ore at lowest in more than a week
* Dalian futures steady, Shanghai rebar up slightly
By Manolo Serapio Jr
Sept 17 (Reuters) - Spot iron ore prices dropped to their lowest in more than a week and Chinese futures struggled to scale higher on Thursday, pressured by slow steel demand in the world's top consumer.
Chinese buying interest for the steelmaking commodity has slowed after spot prices rose last week to their highest since July.
"Mills are talking lower price levels for iron ore than the current market, citing weak demand for steel," said an iron ore trader in Shanghai.
Iron ore for immediate delivery to China's Tianjin port fell 0.7 percent to $56 a tonne on Wednesday, the lowest since Sept. 7, data compiled by The Steel Index showed.
The spot benchmark hit a 10-week peak of $58.50 on Sept. 10.
On Thursday, the January iron ore contract on the Dalian Commodity Exchange was unchanged at 394.50 yuan ($62) a tonne by 0308 GMT, not far above Wednesday's one-week low of 391 yuan.
Weaker steel demand at home has forced many Chinese producers to sell more abroad. The country's steel exports rose 27 percent to 71.87 million tonnes in January-August.
"I think a lot of mills now rely on steel exports to absorb their production. If mills are able to export cargoes they can still make some profit margins. Otherwise they will continue to lose money," said the Shanghai trader.
Rising Chinese exports have led to trade tensions with other countries, with foreign markets accusing Chinese producers of slashing prices to be able to sell more.
But China's commerce ministry said on Wednesday that using anti-dumping measures to restrict Chinese steel exports will not provide a lasting solution to the growing trade tensions.
"Any push-back on Chinese steel exports is likely to result in weaker iron ore prices," ANZ Bank said in a note.
Construction-used rebar on the Shanghai Futures Exchange SRBcv1 rose 0.5 percent to 1,935 yuan a tonne, not far from Tuesday's one-week trough of 1,907 yuan.
Rebar and iron ore prices at 0304 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
1935
+9.00
+0.47 DALIAN IRON ORE DCE DCIO JAN6
394.5
+0.00
+0.00 SGX IRON ORE FUTURES OCT
53.94
+0.20
+0.37 THE STEEL INDEX 62 PCT INDEX
56
-0.40
-0.71 METAL BULLETIN INDEX
57.21
-0.07
-0.12
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3662 Chinese yuan)