Iron Ore-Shanghai rebar hits record as costs rise

* Iron ore prices steady near record highs

* Cyclone threatens coal mining areas in Queensland

* Indian futures gain (Updates Shanghai rebar price, adds Indian futures)

By Manolo Serapio Jr

SINGAPORE, Feb 1 (Reuters) - Shanghai steel rebar futures edged up to a record for the second straight session on Tuesday, buoyed by higher costs of raw materials like iron ore and coking coal.

Tight supplies have been boosting prices of the steelmaking ingredients, and a massive cyclone is threatening coal mining areas again in the key producing Queensland state of Australia, still reeling from the impact of flooding last month.

The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange closed up 0.5 percent at its intraday peak of 5,124 yuan per tonne.

But volume was relatively thin, with just over 157,000 lots traded versus a peak of nearly 400,000 lots last week as activity winds down ahead of China's Feb. 2-8 Lunar New Year holiday.

Spot iron ore prices hovered near record highs, with offers stuck around $188-$190 per tonne for Indian ore with 63.5 percent iron content, said Chinese consultancy Umetal.

Key indexes, up 9-10 percent in January, and which global miners use in determining prices for quarterly contracts, are expected to be mostly steady until Chinese players return middle of next week.

"It will be tricky to organise and get the paperwork through for a whole new contract at this time," said Cameron Hunt, director of Metal Bulletin's iron ore index.

"Chances are with zero business going on, markets will be flat."

Metal Bulletin's 62 percent benchmark .IO62-CNO=MB slipped 17 cents to $183.59 a tonne on Monday, cost and freight delivered to China, still less than a dollar away from the record $184.43 hit last week.

The Platts 62 percent iron ore index IODBZ00-PLT was flat at $186.75 a tonne.

The Steel Index 62 percent gauge .IO62-CNI=SI gained 30 cents to $185.60, near its all-time high of $185.70 reached on Jan. 21.

Tight Indian supplies will continue to support iron ore prices and traders are eyeing a court ruling in India later this month on an export ban at the southern Karnataka state, enforced since July.

India's Supreme Court is due to decide mid-February on whether to lift the ban, a ruling analysts say could influence a plan by another Indian state, top iron ore producer Orissa, to ban exports as well and should help set the direction for prices.

But worries about tight supplies kept the market in backwardation, with spot prices trumping forward swaps and futures.

The Singapore Exchange-cleared February contract rose $3.30 to $182.80 a tonne on Monday, March was up 75 cents at $175 and April gained $1.70 to $166.20.

Indian iron ore futures rose modestly on the third day of trading since the country launched the world's first futures market for the raw material on Saturday.

At 0800 GMT, 62 percent Indian iron ore fines for March delivery rose 0.8 percent to 7,530 rupees ($164) per tonne on the Multi Commodity Exchange, free on board.

A similar 62 percent grade for March delivery on the Indian Commodity Exchange gained 0.8 percent to 8,109 rupees a tonne, including freight cost to China.

Trading volumes have been lean since the weekend launch and analysts say the contracts are unlikely to be considered global benchmarks anytime soon unless liquidity picks up strongly and with trading limited to domestic players. ($1 = 45.92 rupees) (Reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)