* Coking coal gives up gains amid weakness in steel futures
* Steel supply growing as seasonal demand disappoints - CRU
By Manolo Serapio Jr
MANILA, April 6 Chinese rebar steel futures
dropped more than 2 percent on Thursday, pressured by growing
supply while seasonal demand in the world's largest steel
consumer appears to be slower than many had expected.
The weakness in steel dragged down prices of steelmaking raw
material iron ore. Coking coal, also used to produce steel, fell
after earlier matching Wednesday's four-month high. Coking coal
jumped more than 8 percent in the previous session amid worries
over tighter supply after Cyclone Debbie slammed into top
The most-active rebar contract on the Shanghai Futures
Exchange closed down 2.4 percent at 3,162 yuan ($458) a
"Supply tightness has eased and seasonal demand is much
slower than expected," said Richard Lu from CRU consultancy in
Steel demand in China typically rises during spring, along
with construction activity, after the winter lull.
Chinese traders' stockpiles of rebar, a steel product used
in construction, continue to drop although Lu said the decline
has eased in recent weeks. The inventory fell 4.5 percent last
week to 6.73 million tonnes and has dropped 20 percent since
reaching a three-year high in February, according to data
tracked by SteelHome consultancy. SH-TOT-RBARINV
Demand is currently slowing down and output of long
products, including rebar, is rising, said Lu.
Activity in China's steel industry expanded at a slower pace
in March, an industry survey showed last week. The Purchasing
Managers' Index for the steel sector fell to 50.6 in March from
51.4 in February.
Iron ore on the Dalian Commodity Exchange slipped
0.9 percent to end at 560 yuan per tonne.
Dalian coking coal dropped 0.3 percent to 1,348.50
yuan per tonne after earlier hitting 1,383 yuan, which was
Wednesday's peak and the highest since Nov. 30.
Coking coal jumped 8.5 percent on Wednesday in its biggest
single-day spike since November amid fears of a weeks-long
stoppage in supply from Australia.
Top coking coal shipper BHP Billiton and
Glencore are among five miners who declared force
majeure on shipments from Australia's Queensland state after
landslides caused by Debbie hit a critical mountain pass on the
railway connecting the world's single biggest source of coking
coal to ports.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
climbed 2.6 percent to $81.54 a tonne on Wednesday, according to
($1 = 6.8995 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Christian