* Steel futures drop to lowest since July 25
* Iron ore hits lowest since July 27
* Demand yet to seasonal pick-up - traders
* Iron ore inventories remain high
(Updates close prices)
SHANGHAI, Sept 12 Chinese steel futures fell to
a seven-week low on Monday amid few signs of a pick-up in demand
in the world's top producer and consumer despite expected
seasonal strength, while worries over a possible U.S. rate hike
dampened commodities more broadly.
The most active rebar futures contract on the Shanghai
Futures Exchange fell as much as 2.3 percent to 2,270
yuan a tonne, its lowest since July 25. It traded 2 percent
lower at 2,277 yuan by close.
Steel demand traditionally picks up in September after the
summer slowdown, but actual demand has failed to show a recovery
since August amid a cooling economy and the suspension of some
construction activity for the G20 summit.
"Real demand in August was not as good as July and the G20
summit in Hangzhou hit consumption, so let's see if demand will
grow in September," said Li Wenjing, an analyst with Industrial
Futures in Shanghai.
On the Dalian Commodity Exchange, the benchmark iron ore
futures contract fell 2 percent to close at 398 yuan a
tonne. It earlier hit a session low of 396.5 yuan a tonne, the
lowest since July 27.
Iron ore port inventories CUS-STKTOT-IORE fell 2 percent
to 103.75 million tonnes by last Friday, but remain at high
levels, sticking above 100 million tonnes since July, industry
website Umetal.com showed.
Chinese commodities fell across the board amid expectations
that U.S. could consider a rate rise later this month. U.S.
Federal Reserve officials are divided on whether a rate rise is
in the offing, with some of the permanent voting members
appearing wary of supporting an immediate hike.
($1 = 6.6790 Chinese yuan renminbi)
(Reporting by Ruby Lian and Josephine Mason; Editing by Richard
Pullin and Christian Schmollinger)