* Xi says reform in China will not stagnate
* But he warns of challenges ahead for economy
* Coking coal down, iron ore little changed
By Enrico Dela Cruz
MANILA, Jan 2 (Reuters) - Shanghai steel futures edged lower on the first trading day of 2019 as investors remained cautious amid China’s weakening domestic demand and worries over global growth and Sino-U.S. trade relations.
The pace of reform in China will not stagnate and the country will open its door wider still to the outside world, President Xi Jinping said on Monday in his New Year message, as he also warned of challenges ahead.
Although Xi made no specific mention of the trade war with the United States, he noted that 2019 would bring both “opportunities and challenges”.
The most-active rebar contract on the Shanghai Futures Exchange was down 0.4 percent at 3,388 yuan ($493.42) a tonne as of 0218 GMT. Hot rolled coil dropped 1.5 percent to 3,295 yuan.
Prices of rebar, used in construction, ended 2018 up 12 percent from a year earlier as China’s crackdown on pollution forced mills to reduce production, curbing supplies in the world’s top consumer.
“Macro news out of China continues to come in on the weaker side and this is undoubtedly weighing on both ferrous and nonferrous valuations,” said INTL FCStone commodity consultant Edward Meir.
The most traded coking coal on the Dalian Commodity Exchange fell nearly 1 percent to 1,164 yuan a tonne. Iron ore was little changed, trading in a narrow range of 492 yuan and 497 yuan, from the previous session’s close of 492.5 yuan.
Coke edged up 0.3 percent to 1,890 yuan a tonne, after easing 0.2 percent earlier in the session.
Spot iron ore for delivery to China SH-CCN-IRNOR62 was steady at $72.60 a tonne on Dec. 29, before the new year holidays, according to SteelHome consultancy.
“Beijing has announced steps to step up spending and lower taxes going into 2019 in order to fight the growing slowdown, but the initiative still falls well short of the rollouts we saw in 2015/16 and in 2008/2009,” Meir said in a note.
($1 = 6.8663 Chinese yuan)
Reporting by Enrico dela Cruz; editing by Richard Pullin