* Coke tumbles 5.4 percent in early trade
* Coking coal, iron ore also see sharp falls
* Steel futures down on signs of lower demand, higher stocks
BEIJING, Sept 28 (Reuters) - Futures prices for Chinese steelmaking raw materials plunged in early trade on Thursday, led by coke, amid bearish indicators for the fourth quarter, when winter limits on steel production are expected to hurt demand.
The Dalian Commodity Exchange’s most-traded coke futures , for January delivery, dived as far as 5.4 percent to 1,189 yuan ($178.83) per tonne, before clawing back to 1,900 yuan per tonne by 0252 GMT, still down 4.83 percent.
Coking coal fared little better. Dalian’s most-traded coking coal contract fell more than 4 percent, before recovering to 1,130.50 yuan per tonne, down 3.21 percent from the previous session.
“Coking coal inventory is too high,” a trader said, adding that stock levels were currently at 20 days, above the usual level of 10 days and even the winter norm of 15 days. He declined to be identified as he was not authorised to speak with media.
Iron ore for January delivery on the Dalian exchange had tumbled as much as 3.7 percent to 451 yuan per tonne by 0135 GMT, before pulling back to 452 yuan per tonne, still down 3.3 percent.
“Iron ore fundamentals are not good,” said Zhao Xiaobo of Sinosteel Futures in Beijing. “Imports will rise in the fourth quarter and the environmental restrictions on steel mills are reducing iron ore demand.”
Adding to the bearish tone, the China Iron and Steel Association said late on Wednesday that Chinese steel product stocks had rise by 5 percent from the end of August and that prices would show a downward trend.
Meanwhile, the most-traded construction steel contract on the Shanghai Futures Exchange had slumped 1.95 percent to 3,573 yuan ($537.41) per tonne at 0144 GMT, before recovering to 3,589 yuan per tonne, still down 1.51 percent.
Steel demand is likely to fall in October due to government policy and seasonal factors, analysts at Orient Futures said in a note.
The impact of output cuts at Chinese steel mills may not be felt until November, but will be offset by the resumption of production at mills outside northern China which are not subject to environmental restrictions, they added.
Some northern Chinese cities, such as Handan in Hebei province, have said winter restrictions on blast furnaces will take effect from Oct. 1.
$1 = 6.6486 Chinese yuan renminbi Reporting by Tom Daly; Editing by Joseph Radford