* China steel, iron ore down about a third from April peaks
* Other commodity futures in China up after recent losses
By Manolo Serapio Jr
MANILA, May 26 (Reuters) - Chinese steel futures struggled to pull away from 12-week lows on Thursday and iron ore dropped more than 2 percent with the outlook for both commodities still shaky in the face of high supply.
Both commodity futures have lost nearly a third from their peaks in April when a rally pinned largely on retail investors boosted volumes sharply and prompted regulators to impose curbs to restore calm.
"The market's very concerned about steel mills that have restarted and adding to the oversupply," said Helen Lau, analyst at Argonaut Securities in Hong Kong.
A surge in Chinese steel prices earlier this year, hitting 19-month highs in April, pushed once-shut mills to reopen. But the ensuing retreat in prices could force them to rethink.
The most-traded rebar on the Shanghai Futures Exchange was flat at 1,941 yuan ($296) a tonne by 0308 GMT, after falling as far as 1,907 yuan, its lowest since March 4.
The construction steel product has given up 30 percent from its peak in April.
On the Dalian Commodity Exchange, iron ore was down 2 percent at 340.50 yuan a tonne, after touching a session low of 338 yuan, its weakest since March 1. The contract has fallen 32 percent from its April high.
The losses in futures could weigh further on spot iron ore prices and come despite a recovery in other commodity futures traded in China, from cotton to soymeal.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI slipped 0.4 percent to $50 a tonne on Wednesday, the lowest since Feb. 29, according to The Steel Index.
The spot benchmark has fallen 27 percent from a 15-month high reached in April.
"Short of China printing better PMI, it's going to get more challenging. Iron ore in the high $40s, low $50s seems right going forward," Peter O'Connor, analyst for Shaw and Partners in Sydney.
China's official purchasing managers' index (PMI) showed factory activity expanded for the second month in a row in April but only marginally, while a private survey showed manufacturing PMI posting 14 straight months of sector contraction.
$1 = 6.5577 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Richard Pullin