* Dalian futures rose as much as 6.8 pct after record low
* Spot iron ore may recover from Wednesday's 11-pct plunge
By Manolo Serapio Jr
MANILA, July 9 (Reuters) - Iron ore futures in China bounced back on Thursday after an early-week rout that pulled prices to a record low, lifting bids for physical deals although traders remained wary because of soft steel demand.
The higher bids could spark a recovery in benchmark spot iron ore later in the day after it tumbled more than 11 percent on Wednesday to its lowest in a decade below $45 a tonne.
Iron ore for September delivery on the Dalian Commodity Exchange DCIOcv1 was up 4.5 percent at 368.50 yuan ($59) a tonne by the midday break, after dropping to 333 yuan in overnight trading, its lowest since its October 2013 launch.
"It's not realistic to short (Dalian iron ore futures) too much because demand is still there. Steelmakers will continue operations and they will continue to buy the raw material," said Wang Li, consultant at CRU Group in Beijing.
The recovery in futures followed a rebound in battered Chinese stocks after the securities regulator ordered shareholders with stakes of more than 5 percent from selling shares for the next six months. ID:nL3N0ZO5WX
Bids in the physical iron ore market also rose. A 90,000-tonne cargo of 62-percent grade Australian iron ore fines was sold at $47.25 per tonne on the globalORE platform, up from $43 on Wednesday. Another 90,000-tonne cargo of the same grade was sold at $46.75 a tonne.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI plummeted 11.3 percent to $44.10 a tonne on Wednesday, according to The Steel Index (TSI).
It was the lowest on record since TSI began compiling the data in late 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.
Some traders remained cautious on iron ore prices given the recent volatility and with Chinese steel demand likely to remain weak until next month.
Citing loss-making steelmakers, CRU's Li said iron ore demand in China may be outweighed by the inflow of additional supply in July and August that could increase inventories again at Chinese ports.
"But such a situation doesn't support a price drop of $15," said Li, referring to the fall in iron ore prices over the past week.
Iron ore rallied as much as 40 percent from a low of $46.70 a tonne reached in April, but has now fallen by a third from its peak above $65 a tonne last month.
($1 = 6.2085 Chinese yuan) (Editing by Tom Hogue)