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* Dalian iron ore slid 7 pct on Weds after China rating downgrade
* Baltic Exchange main shipping index falls to three-month low
By Manolo Serapio Jr
MANILA, May 25 (Reuters) - Chinese iron ore futures fell for a third day in a row on Thursday amid persistent worries over demand, with stockpiles mounting around the country's ports.
Those demand concerns were amplified on Wednesday by Moody's downgrade of China's credit ratings, potentially limiting Beijing's capacity to spur economic growth and affecting demand for steel.
The most-active iron ore contract, for September delivery, on the Dalian Commodity Exchange was down 1 percent at 462 yuan ($67) a tonne by 0202 GMT, but off a session-low of 454 yuan.
The steelmaking commodity slid 7 percent on Wednesday, its sharpest fall in more than two weeks and the hardest hit among China's commodity futures, after the Moody's downgrade.
"Such a harsh reaction in China's futures markets underpins our view that prices had been pushed higher by improving sentiment rather than improving fundamentals, given that the downgrade does not affect the short-term demand outlook," Julius Baer analyst Carsten Menke said in a note.
"Medium to longer term, the debt burden may limit the government's ability to stimulate the economy via metals-intensive infrastructure investments ... We still see downside for iron ore as well as steel prices and remain cautious."
The most-traded rebar on the Shanghai Futures Exchange was off 0.2 percent at 3,252 yuan a tonne.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slid 2.4 percent to $60.52 a tonne on Wednesday, according to Metal Bulletin.
It was the weakest level since May 11 for the spot benchmark, which has lost 23 percent this year.
Imported iron ore inventories at China's ports rose to 136 million tonnes last week, the most since 2004, according to SteelHome consultancy. SH-TOT-IRONINV
In a sign of weak demand, the Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities including iron ore, fell to its lowest in nearly three months on Wednesday.
$1 = 6.8866 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Joseph Radford