* Rebar edges up 0.3 percent, iron ore adds 0.6 pct
* China’s steel demand stable as inventories fall - analyst
* China could cut 16 MT steel capacity by end Q1 2019 - ANZ
By Tom Daly
BEIJING, Oct 25 (Reuters) - Shanghai construction steel futures edged up in early trade on Thursday and were on course for a fourth straight day of gains as the ferrous complex avoided the downward spiral in global equities and base metals markets.
The most traded steel rebar contract on the Shanghai Futures Exchange, for January delivery, was up 0.3 percent at 4,171 yuan ($600.85) a tonne as of 0215 GMT, having fallen as much as 0.4 percent earlier in the session. It closed up 0.1 percent on Wednesday and hit a one-week high of 4,197 yuan a tonne overnight.
Hot-rolled coil futures meanwhile added 0.5 percent to 3,914 yuan a tonne. Ferrous complex fundamentals are strong, with downstream steel demand in China stable and inventories continuing to drop, said Zhao Xiaobo, an analyst with Sinosteel Futures in Beijing.
Stockpiles of steel products at Chinese traders fell by 370,000 tonnes to 10.3 million tonnes in the week to Oct. 19, according to data compiled by consultancy Mysteel.
Furthermore, China’s spot steel prices are around 600 yuan a tonne higher than futures prices and the new national standard for rebar, to be introduced on Nov. 1, will increase costs by 200 yuan a tonne, Zhao added.
Steelmaking raw materials also moved broadly higher, with iron ore on the Dalian Commodity Exchange rising 0.6 percent to 530.5 yuan a tonne. Dalian coke rose 0.5 percent, while coking coal inched up 0.1 percent.
“This year tightness in the iron ore market looks likely to persist in the short term,” ANZ wrote in a note on Thursday, adding that China’s supply-side reform measures “should see demand for high grade ore remain high.”
The bank estimated that China’s crackdown on heavy industry could see 16 million tonnes of annual crude steel capacity cut in the fourth quarter of this year and the first quarter of 2019. “This comes amid an improving backdrop for steel demand,” it said. ($1 = 6.9418 Chinese yuan renminbi) (Reporting by Tom Daly; editing by Richard Pullin)