* Spot iron ore fell to 10-year low on Tuesday
* Shanghai rebar gives up bulk of 4 pct gain (Updates prices)
By Manolo Serapio Jr
MANILA, Nov 25 (Reuters) - Dalian iron ore futures climbed 2 percent on Wednesday, recovering from steep losses that sent prices to a record low as a struggling Chinese steel market dimmed the demand outlook for the raw material.
Shanghai steel futures rose as much as 4 percent but had surrendered most of it at the close, reflecting investors' caution towards Chinese consumption as a slowing economy cuts demand.
Spot iron ore dropped to less than $44 a tonne on Tuesday, its lowest in a decade.
"I think iron ore has been oversold and we are seeing a technical recovery along with other commodities, but the outlook for next year remains negative due to weak fundamentals," said Yu Yang, analyst at Shenyin and Wanguo Futures in Shanghai.
The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 closed up 2 percent at 306 yuan ($48) a tonne. It fell to 299 yuan earlier, the lowest for a most-active contract since launch in October 2013.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI shed 1.8 percent to $43.40 a tonne on Tuesday, according to The Steel Index (TSI).
It was the lowest price on TSI's records that began in 2008. Based on annual pricing that preceded the current spot-based system, it was the lowest since 2005, according to data compiled by Goldman Sachs (N:GS).
"Snow in northern China is causing problems transporting iron ore from port to mill, causing some to stop purchasing and others to shut down their furnaces," TSI said.
Many Chinese steel mills have either curbed or halted output as demand continued to shrink this year after falling in 2014 for the first time in more than three decades. urn:newsml:reuters.com:*:nL3N13C2BB
Moody's Investors Service said its negative outlook for Asian steel companies reflects its expectation that profitability will continue to decline, as oversupply and weakening Chinese demand will further pull prices lower.
"Slow property investment, modest infrastructure spending and lacklustre manufacturing will reduce Chinese steel demand by about 5 percent in 2016," Jiming Zou, Moody's vice president and senior analyst, said in a statement.
Rebar, a construction steel product, ended 0.8 percent higher at 1,676 yuan a tonne on the Shanghai Futures Exchange SRBcv1 , after peaking at 1,729 yuan. The most-traded contract touched a record low of 1,649 yuan on Monday.
Rebar and iron ore prices at 0758 GMT
Contract
Last
Change Pct Change SHFE REBAR MAY6
1676
+13.00
+0.78 DALIAN IRON ORE DCE DCIO MAY6
306
+6.00
+2.00 SGX IRON ORE FUTURES JAN
41.5
+0.34
+0.83 THE STEEL INDEX 62 PCT INDEX
43.4
-0.80
-1.81 METAL BULLETIN INDEX
43.89
-0.86
-1.92
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3877 Chinese yuan)