* Chinese iron ore futures firmer, rebar down
* Spot iron ore drops
* High China steel output weighs on outlook
By Jim Regan (Australia)
SYDNEY, April 11 (Reuters) - Chinese iron ore futures were firmer on Tuesday, but remained under pressure from concerns demand is slowing in the world's biggest market for industrial materials.
"The trend is still for steel and iron ore to weaken in the coming weeks," said a trader active on the Shanghai Futures Exchange. "There is a lot of steel and iron ore being produced, too much."
Iron ore for September delivery on the Dalian Commodity Exchange closed up 0.2 percent at 524.50 yuan ($76) a tonne. On Friday the contract fell by its 8 percent limit.
Spot iron ore prices .IO62-CNO=MB continued to fall overnight, dropping 1 percent to $74.71 a tonne, well below the high for 2017 of $94.86 reached in February.
The trader said Chinese markets were bracing for a further influx of imported iron ore. That would add to the 131.35 million tonnes already held at Chinese ports, according to data from SteelHome SH-TOT-IRONINV. Iron ore inventories peaked for 2017 on March 24 at 132.45 million tonnes, the most since it began tracking the data in 2004.
"There doesn't seem to be a let up in imports from the major producers," Commonwealth Bank of Australia analyst Vivek Dhar said.
Analysts expect Fortescue Metals Group to report in its latest quarterly update on Thursday that it is on track to meet the high end of its fiscal 2017 production guidance of 170 million tonnes.
Later this month Australia's top producers, Rio Tinto and BHP Billiton , are also forecast to show strong quarterly output.
Each of the companies ship directly to China.
Output gains by Rio Tinto and BHP could be greater than recent quarters past due to premiums being placed on higher-grade ore the two companies mine to combat the rise in coking coal prices caused by cyclonic damage to rail lines hauling coal to ports.
The spread between the price of 62 percent grade ores BHP and Rio mine and blend and the roughly 58 percent product Fortescue produces currently sits at around $15 a tonne versus a more typical $10 premium, according to commodity analysts. By using higher grade ore, steel makers are able to reduce the need for coking coal, the other key component in the production process.
The most-active rebar on the Shanghai Futures Exchange closed down 1.3 percent at 2,982 yuan ($432) per tonne.
$1 = 6.9031 Chinese yuan renminbi Reporting by James Regan; Editing by Christian Schmollinger