* Rio dismisses Fortescue’s call for iron ore output cap
* Piles more pressure on spot iron ore, now below $55/T
* Shanghai rebar also hits record low, but cuts losses (Updates spot price)
By Manolo Serapio Jr
SINGAPORE, March 27 (Reuters) - Spot iron ore prices hit new record lows on Friday while futures in China and Singapore slid as much as 4 percent before paring losses, on worries that global producers would continue to lift output in a well supplied market.
Iron ore prices on China’s Dalian Commodity Exchange hit the daily floor set by the bourse, touching a new all-time low and creating further downside risk for spot values that this week fell to their lowest since records began in 2008.
The head of Rio Tinto , the world’s second-largest iron ore miner, on Thursday dismissed as “harebrained” a suggestion by smaller rival Fortescue Metals Group that miners should cap output of the steelmaking material to boost prices.
“Rio Tinto’s reaction definitely hit the market as it has no intention of cutting output in order to lift prices,” said Li Wenjing, analyst at Industrial Futures in Shanghai.
“Fortescue is already standing on the edge of its breakeven price. And most domestic mills are losing money at this level as well.”
Iron ore for immediate delivery to China .IO62-CNI=SI dropped 1.3 percent to $54.10 a tonne on Friday, data from The Steel Index showed. The price is the lowest since TSI began compiling records in late 2008.
The most-traded September iron ore contract on the Dalian exchange fell 4 percent to its downside limit of 414 yuan ($67) a tonne, the lowest for a most-active contract, before closing down 2.1 percent at 422 yuan.
On the Singapore Exchange, May iron ore dropped 4 percent to a session low of $50.90 per tonne, before cutting losses to trade at $52, down 1.8 percent.
Three-quarters of China’s domestic iron ore capacity is incurring losses, said Yang Jiasheng, chairman of the Metallurgical Mines Association of China, as a sustained price slump batters higher cost producers.
The price of iron ore has more than halved in the past 12 months amid a glut deepened by soaring output from low-cost mega miners from Australia and Brazil squeezing smaller suppliers out of the market.
Stocks of imported iron ore at Chinese ports have been stuck at or below the 100-million tonne mark since the start of the year and look set to drop further as falling prices drive away buyers.
The most-active October contract on the Shanghai Futures Exchange fell as far as 2,407 yuan a tonne, a record low, before paring losses to end at 2,477 yuan, down 0.9 percent.
Rebar and iron ore prices at 0705 GMT Contract Last Change Pct Change SHFE REBAR OCT5 2477 -23.00 -0.92 DALIAN IRON ORE DCE DCIO SEP5 422 -9.00 -2.09 SGX IRON ORE FUTURES APR 53 -0.88 -1.63 THE STEEL INDEX 62 PCT INDEX 54.8 -0.70 -1.26 METAL BULLETIN INDEX 55.36 -0.45 -0.81 Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day
$1 = 6.2114 Chinese yuan Additional reporting by Shanghai Newsroom and Maytaal Angel in London; Editing by Joseph Radford and David Evans