* Seasonal weakness in demand weighs on prices
* Mills cut production, denting appetite for raw materials (Updates close prices)
SHANGHAI, Jan 26 (Reuters) - Chinese steel markets fell on Friday on the back of tepid winter demand, dragging down prices for raw materials.
Construction work in China has stalled due to frigid weather, denting steel consumption, while other industrial activity has slowed ahead of the Lunar New Year holiday starting mid-February.
“Snows hit more regions in China this week and physical demand has remained weak. Prices could keep fluctuating within a narrow range before spring,” said a steel trader in Shanghai. He declined to be identified as he was not authorised to speak with media.
The most active rebar on the Shanghai Futures Exchange was down 0.3 percent at 3,945 yuan ($624.32) a tonne by the close. It ended the week up 1.7 percent in its third-straight weekly gain.
Chinese steel mills have been cutting production since mid-November as the government ordered producers in 28 cities to trim output to fight air pollution, curbing appetite for iron ore and coke, the two main raw materials.
Iron ore on the Dalian Commodity Exchange fell 1.5 percent to 519 yuan.
Coke climbed 0.2 percent to 2,041 yuan a tonne and coking coal dipped 0.5 percent to 1,301 yuan a tonne.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 51 cents to $75.04 a tonne on Thursday, according to Metal Bulletin.
$1 = 6.3189 Chinese yuan Reporting by Ruby Lian and Josephine Mason; Editing by Sherry Jacob-Phillips and Joseph Radford