* Rebar hits 2nd lowest on record, Dalian ore touches 7-week low     * More client inquiries after fall in iron ore prices     * China port stockpiles at record high of 110.6 mln tonnes      By Manolo Serapio Jr     SINGAPORE, May 12 (Reuters) - Shanghai steel rebar futures edged higher on Monday after a three-day slide, tracking firmer equities, although a weak outlook for demand in top consumer China has capped gains.     A fall in iron ore to near $100 a tonne, the lowest level since September 2012, has spurred interest among some Chinese steel mills, but traders say a breach of that level remains on the cards amid ample spot supplies.     The most-traded rebar contract for October delivery on the Shanghai Futures Exchange  
  SRBcv1
   was up 0.3 percent at 3,180 yuan ($510) a tonne by midday. It fell to 3,152 yuan earlier, the second lowest for a most-active contract since the bourse launched them in 2009.     A spike in Chinese shares, which gained 2 percent after Beijing pledged to push ahead with capital market reforms, helped rebar regain some ground, but the fundamentals for the steel sector remain weak, said Zhou Ting, an analyst at Jinrui Futures in Shenzhen.   
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       "The outlook for steel continues to be bleak because the Chinese real estate market is undergoing a very tough period. Some of them are in need of money and because of tighter credit, they're trying to destock so real estate investment has slowed," said Ting.         Rebar, a steel product used in construction, could fall further to 3,000 yuan in the near term, he said.     The price of steel billet in China's key Tangshan area has fallen another 40 yuan to 2,850 yuan per tonne over the weekend, traders said, reflecting slow demand.     Baoshan Iron & Steel Co Ltd (Baosteel)  
  600019.SS
  , China's biggest listed steelmaker, slashed prices for a second straight month in June.  
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       "We think Baosteel's price cut will further dampen market sentiment towards steel sector. If steel prices cannot be held stable through June, then it will be less likely to see rebound through slow summer season in July and August, in our view," Helen lau, a senior mining analyst at UOB-Kay Hian Securities, said in a note.          RECORD STOCKPILES     The weaker steel market in China along with ample supplies had dragged down spot iron ore prices, which have lost 14 percent since peaking at above $119 a tonne in early April.     Iron ore for immediate delivery to China  
  .IO62-CNI=SI
   dropped nearly 1 percent to $102.70 a tonne on Friday, the lowest since Sept. 14, 2012, based on data compiled by Steel Index.     "I think a price lower than $100 is very possible right now. However, many buyers are asking for cargoes after the latest price drop so the market seems a little warmer," said an iron ore trader in Rizhao city in China's eastern Shandong province.      Top miner Vale  
  VALE5.SA
   is offering a 150,000-tonne cargo of 64.04-percent grade Brazilian Carajas iron ore fines at a tender on Monday after selling nearly 800,000 tonnes via tenders last week, traders said.     Rio Tinto  
  RIO.AX
   is offering 170,000 tonnes of 61-percent grade Australian Pilbara iron ore fines at a separate tender on Monday, traders said.       A fall in iron ore below $100 a tonne may shut high-cost mines in China and fuel demand for imported iron ore, ANZ Bank said.     "Past episodes of depressed prices have resulted in domestic producers stepping down production until prices recover. A marked reduction in domestic supply is positive for seaborne iron ore demand," ANZ said in a note.      A group of tugboat workers in Port Hedland will vote later in the day on whether to strike as they seek better employment terms. Used by Australian miners BHP Billiton  
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   and Fortescue Metals  
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  , the port handles a fifth of global seaborne trade.     A potential disruption in shipments from BHP and Fortescue  may provide a floor to iron ore prices, but traders say it is unlikely to fuel a rally.     "There may be some positive impact on sentiment, but I don't think this will change the situation which is that the market is actually over supplied," said an iron ore trader in Shanghai.      Stocks of imported iron ore at 44 Chinese ports stood at a record high of 110.55 million tonnes as of May 9, according to industry consultancy Steelhome.     At the Dalian Commodity Exchange, the most-active September iron ore contract  
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   was down 0.4 percent at 733 yuan a tonne, after hitting a seven-week low of 726 yuan earlier.           Contract                          Last    Change   Pct Change   SHFE REBAR OCT4                   3180     +8.00        +0.25   DALIAN IRON ORE DCE DCIO SEP4      733     -3.00        -0.41   THE STEEL INDEX 62 PCT INDEX     102.7     -1.00        -0.96   METAL BULLETIN INDEX            103.03     -2.21        -2.10     SGX IO 62%Fe MAY14  SWAP         103.25     -0.33        -0.32   Dalian iron ore and Shanghai rebar in yuan/tonne   Index and swaps in dollars/tonne, show close for the previous trading day  ($1 = 6.2280 Chinese yuan)   (Editing by Anand Basu)  ((manolo.serapio@thomsonreuters.com; +65 6870 3884; Reuters Messaging: manolo.serapio.thomsonreuters.com@reuters.net))  Keywords: MARKETS IRONORE/