* Rebar stocks fall from 3-year high as demand picks up
* China steel exports hit 3-year low in February
* Spot iron ore price seen at risk from low-cost supply
By Manolo Serapio Jr
MANILA, March 8 (Reuters) - Chinese steel futures slipped for a second day on Wednesday as investors locked in recent gains, though the outlook for the commodity remained firm as declining traders' stockpiles pointed to a pick-up in demand.
Inventory of rebar among Chinese traders had fallen in the past two weeks, after hitting a nearly three-year high of 8.3977 million tonnes in mid-February, according to SteelHome consultancy. It stood at 7.8362 million tonnes as of March 3. SH-TOT-RBARINV
"We think end-user demand is picking up at the moment because of improving construction activity," said CRU consultant Richard Lu in Beijing.
Lu said the drop in futures prices reflected profit-taking among traders with long positions.
"And perhaps because current margins at mills are high, mills may lift production to boost profits, implying more supply," he said. CRU's estimates put margins of Chinese rebar producers at around $36 a tonne, compared with $10-$13 in early January.
The most-active rebar on the Shanghai Futures Exchange closed down 1.5 percent at 3,425 yuan ($496) a tonne. The construction steel product touched a three-year peak of 3,648 yuan on Feb. 27.
Amid strong domestic demand, China's steel exports fell to a three-year low of 5.75 million tonnes in February, customs data showed.
Iron ore on the Dalian Commodity Exchange ended flat at 661.50 yuan a tonne, after three days of declines.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB was nearly unchanged at $89.80 a tonne on Tuesday, near a three-week low, according to Metal Bulletin.
The spot benchmark has mostly dropped since hitting a 30-month peak of $94.86 on Feb. 21, and Commonwealth Bank of Australia expects it to decline to $60 by the fourth quarter as low-cost supply increases. ($1 = 6.9038 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu)