* Chinese markets shut on Oct. 3-7 for National Day break
* ANZ says now sees China's 2016 steel output up, not down
* Steel demand seen recovering on housing, infrastructure
By Manolo Serapio Jr
MANILA, Sept 30 Chinese steel and iron ore
futures pulled back on Friday as investors locked in recent
gains ahead of a week-long holiday although some expect demand
for the two commodities to bounce back.
The most-traded iron ore on the Dalian Commodity Exchange
closed down 3.2 percent at 404.50 yuan ($61) a tonne,
after touching a three-week high of 426.50 yuan on Thursday.
The retreat in iron ore followed losses in steel prices. The
most-active rebar on the Shanghai Futures Exchange fell
2.3 percent to 2,253 yuan per tonne, after scaling a two-week
peak on Monday.
There was limited activity in physical markets ahead of
China's National Day holiday when markets will be shut between
Oct. 3 and 7.
There were a few deals in the spot iron ore market this
week, traders said, but they said most steel mills have either
enough stocks of the raw material or have replenished
inventories well ahead of the holiday.
China's steel demand should strengthen after the week-long
break on the back of relatively strong investment in the housing
and infrastructure sectors, said Daniel Hynes, senior commodity
strategist at ANZ.
ANZ is now looking at China's crude steel production to rise
2 percent this year versus an earlier forecast for a decline of
"With the construction cycle lasting approximately 12 to 18
months, building completions are likely to stay relatively
strong through 2017," said Hynes.
"This should be positive for steel demand, and thus iron ore
prices for the remainder of the year."
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI
rose 0.4 percent to $56.10 a tonne on Thursday, according to The
The spot benchmark has lost nearly 5 percent in September,
on track for its first monthly fall in four.
($1 = 6.6702 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Christian
Schmollinger and Amrutha Gayathri)