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* Recent selloff in Chinese steel, iron ore futures overdone - ANZ
* Surge in steel comes despite Trump's probe into Chinese exports
* Shares of Asian steelmakers also rise
* Dalian iron ore earlier climbed by 8 pct daily limit (Updates prices)
By Manolo Serapio Jr
MANILA, April 21 (Reuters) - Chinese iron ore futures rallied 6 percent on Friday, extending hefty gains for a second session along with steel prices, after a recent selloff that market participants thought was overdone.
Both commodities plunged to their lowest since January in the previous session amid worries over well-supplied markets and slow demand. The selloff that began last month has shaved Chinese steel futures prices by 8 percent and iron ore by 10 percent in April.
Friday's surge came as shares of most Asian steelmakers rose, deflecting the first salvo of a long-anticipated anti-dumping campaign from U.S. President Donald Trump.
Citing concerns about national security, Trump on Thursday launched a trade probe against China and other exporters of cheap steel into the U.S. market, raising the possibility of new tariffs.
The most-active iron ore on the Dalian Commodity Exchange closed up 6 percent at 505.50 yuan ($73.45) a tonne. The contract earlier soared by the exchange-set 8 percent limit to a session high of 515 yuan.
Construction steel product rebar on the Shanghai Futures Exchange rose 3 percent to 2,928 yuan per tonne.
Both iron ore and rebar rebounded sharply at the close on Thursday after falling to their weakest intraday levels since Jan. 9. For the year, the two commodities are up nearly 10 percent each.
Iron ore rode steel's rally this year and was consequently sold off as steel prices faltered with mills and traders dealing with big inventories.
In anticipation of brisk demand that typically picks up from April, China's crude steel output reached a record 72 million tonnes in March.
"We are still constructive on iron ore, with enough bullish price indicators to suggest the selloff in recent weeks is overdone," ANZ commodity strategist Daniel Hynes said in a report.
"However in the short term, negative sentiment will make it difficult to arrest the selling and for prices to stabilise. Once it does, we would look for prices to settle in the $70-$80/tonne range for the remainder of the year."
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 1.2 percent to $65.36 a tonne on Thursday, according to Metal Bulletin, gaining for a second session in a row.
Hynes said while market sentiment has recently turned bearish on the resilience of property and infrastructure construction in China, the country's steel capacity closure program remains on track and its economic growth outlook stable.
"We expect the iron ore market to be balanced. In fact with industry costs starting to rise, key support levels have been breached, suggesting prices should recover," he said.
Steelmaking coal futures also jumped. Dalian coking coal climbed 5.1 percent to 1,138.50 yuan a tonne and coke rose 6 percent to 1,651 yuan. ($1 = 6.8826 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu)