* Coke futures fall as physical market at break
* Coke outlook remains positive
* Expected restarts at mills in March to lift coke demand (Updates close prices)
SHANGHAI, Feb 9 (Reuters) - Chinese coke futures fell on Friday for the first time in seven days as physical demand for raw materials dropped ahead of the Lunar New Year holidays that start next week, though the outlook remains positive as demand should rebound after the break.
The most-actively traded coke contract for May delivery on the Dalian Commodity Exchange fell 1.91 percent to 2,105.5 yuan ($333.78) a tonne by close.
The contract still surged 4.8 percent this week, the biggest weekly gains since late November.
Steel production has slowed ahead of the week-long Chinese New Year holidays that start next Thursday.
“Physical market is taking a break now, and the outlook on post-holiday coke prices is optimistic amid wide expectation that steel mills would restart production after the heating season,” said Jin Tao, an analyst with Guotai Junan Futures in Shanghai.
Steel producers and coke plants in 28 Chinese cities were ordered to slash production during the winter heating season from Nov. 15 to March 15 as part of government efforts to fight smog.
The resumption of output from those plants after the end of the winter shutdown has supported iron ore demand and prices.
On the Dalian Commodity Exchange, iron ore futures stood almost steady at 523.5 yuan a tonne. Coking coal slipped 0.5 percent to 1,356 yuan a tonne.
The most active rebar contract on the Shanghai Futures Exchange dropped 0.92 percent to 3,895 yuan a tonne, as physical demand remained subdued after construction activities were slowed by recent icy weather and the holiday slowdown.
The contract ended the week down by 0.96 percent. ($1 = 6.3080 Chinese yuan) (Reporting by Ruby Lian and Josephine Mason; Editing by Christian Schmollinger and Gopakumar Warrier)