* Dalian iron ore prices rise for a third straight session

* Spot 62% iron ore unchanged at $109.5 per tonne

* China to complete local government special bond issuance by end-Oct

BEIJING, July 30 (Reuters) - Iron ore and steel futures in China inched higher on Thursday as Beijing aimed to complete local government special bonds issue by end-October, which is seen as a stimulus for infrastructure projects.

China has set the annual local government special bonds issue quota at 3.75 trillion yuan ($536.06 billion) this year. The finance ministry granted local governments the autonomy to use the proceeds, if they have a shortage of infrastructure projects.

The most active iron ore futures on the Dalian Commodity Exchange, for September delivery, rose for a third straight session, up 0.8% at 838 yuan ($119.79) per tonne as of 0230 GMT.

October delivery steel rebar, used as construction material, rose 0.5% to 3,765 yuan per tonne on the Shanghai Futures Exchange.

Hot-rolled coils rose 0.5% to 3,794 yuan a tonne.

FUNDAMENTALS

* Spot prices of iron ore with 62% iron content for delivery to China was unchanged at $109.5 per tonne on Wednesday from the previous session.

* Shanghai stainless steel jumped 1.3% to 13,915 yuan a tonne.

* Dalian coking coal fell 1.4% and coke inched 0.2% lower.

* Rio Tinto believes China has had a sharp recovery from the COVID-19 economic slump, Chief Executive Jean-Sébastien Jacques said on Wednesday after the world's top iron ore miner reported stronger than expected half-year earnings.

* Miner Fortescue Metals Group on Thursday beat its full-year iron ore estimates with record shipments in the fourth quarter on the back of strong demand for the steel-making ingredient from China.

($1 = 6.9955 Chinese yuan renminbi) (Reporting by Min Zhang and Tom Daly; Editing by Vinay Dwivedi)