* Rebar has fallen more than 4 pct from 7-year high
* But China’s output limits still seen buoying prices (Updates prices)
By Manolo Serapio Jr
MANILA, Aug 28 (Reuters) - Shanghai rebar steel futures dropped nearly 1 percent on Tuesday to fall for a fifth session after last week’s push to a seven-year high, but losses were limited by China’s efforts to curb output as part of its battle against pollution.
The absence of any breakthrough between the United States and China following talks last week on their escalating trade war also soured sentiment.
On Monday, the U.S. Commerce Department said it had made a preliminary determination that imports of certain steel wheels from China were subsidized and it would impose duties on the product.
The most-traded January rebar on the Shanghai Futures Exchange closed down 0.7 percent at 4,232 yuan ($616) a tonne. The construction steel product hit 4,418 yuan on Aug. 22, its highest since September 2011.
A rally in Chinese steel prices over the last two weeks has partly been driven by expectations that production restrictions due to expire on Friday in the top steelmaking city of Tangshan in Hebei province could be extended.
Other Chinese cities have been similarly aggressive in implementing industrial production curbs in line with Beijing’s anti-pollution campaign.
“We have heard a lot of information from local governments saying that there will be continuous supply-side restrictions. If that happens, there will be some further upside for the steel market,” said Kevin Bai, analyst at CRU consultancy in Beijing.
Tuesday’s retreat in steel prices also dragged down steelmaking raw materials iron ore and coking coal.
January iron ore on the Dalian Commodity Exchange slipped 0.5 percent to 482 yuan a tonne and coking coal lost 0.3 percent to 1,272.50 yuan.
The price of coke, the processed form of coking coal, rebounded 2.4 percent to settle at 2,587 yuan, after falling as much as 1 percent intraday.
Spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB dropped 1.8 percent to $65.84 a tonne on Monday, the lowest since July 24, according to Metal Bulletin.
$1 = 6.8740 Chinese yuan Reporting by Manolo Serapio Jr., Editing by Joseph Radford and Sherry Jacob-Phillips