May 25, 2018 / 7:23 AM / a year ago

UPDATE 1-China steel futures rise on declining inventories, raw materials wobble

* Steel inventories drop -Mysteel

* EU launches investigation into some Chinese steel imports

* Iron ore marked worst weekly performance since late March (Update closing prices)

BEIJING, May 25 (Reuters) - Chinese steel futures rose on Friday, with concerns over demand easing amid declining steel inventories in the world’s top producer of the material.

Stockpiles of rebar construction steel at traders had this week fallen 410,000 tonnes to 5.66 million tonnes by Friday, a level last seen in early February, data from Mysteel consultancy showed.

Total inventory of steel products, including rebar, wire rod, hot-rolled coil, cold-rolled coil and steel plate, dropped 6.4 percent to 11.33 million tonnes.

The most-active construction rebar futures on the Shanghai Futures Exchange edged up 0.5 percent to 3,565 yuan ($558.14) a tonne.

Spot steel prices edged down 0.3 percent to 4265.25 yuan a tonne on Thursday, Mysteel data showed.

“Steel and iron ore markets are highly-sensitive to changes in inventory. Prices could wobble as destocking momentums has not completely vanished ... but seasonal demand for steel products is waning,” analysts at Orient Futures said in a note.

On Thursday, the European Commission opened an investigation into hot-rolled steel sheet imported from China, piling more pressure on the country’s steel exports after the United States this week slapped heavy duties on Vietnamese steel originated from China.

The Dalian iron ore contract for September delivery erased its early gains to fall 0.7 percent to 454.5 yuan a tonne, posting its worst weekly performance in nine weeks.

Inventory of iron ore at Chinese ports has been falling over the last three weeks, but the total decline was only 0.8 percent. It stood at 158.98 million tonnes by last Friday, data from SteelHome showed.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB snapped a five-session drop on Thursday, climbing 3.5 percent to $66.38, according to Metal Bulletin.

Coking coal on the Dalian Commodity Exchange slipped 0.5 percent to 1,175.5 yuan a tonne. Coke for September delivery ended 0.2 percent higher at 1,979 yuan a tonne. ($1 = 6.3873 Chinese yuan) (Reporting by Muyu Xu and Josephine Mason Editing by Joseph Radford and Subhranshu Sahu)

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