* Flexible winter curbs likely to keep steel output high - analyst
* Iron ore futures rise; coking coal, coke slip (Adds Fitch Solutions forecast, updates to closing prices)
By Manolo Serapio Jr
MANILA, Nov 19 (Reuters) - Chinese steel prices dropped to their lowest in nearly four months on Monday, pressured by expectations that steel output in the world’s top producer will remain strong as cities impose more flexible production curbs this winter.
Trade worries also dragged on sentiment, with continuing Sino-U.S. tensions on display as Asia-Pacific leaders failed to agree on a communique for the first time ever from a summit over the weekend.
Chinese winter output restrictions to combat smog began on Nov. 15, led by northern cities including steelmaking hubs Tangshan and Handan, in Hebei province, and are expected to last through March.
Unlike last winter, China has allowed cities and provinces to set their own steel output restrictions this year based on their emission levels, ditching the across-the-board limits in 2017.
“You should expect to see much higher production compared with the same time last year,” said Argonaut Securities analyst Helen Lau.
The most-active January rebar on the Shanghai Futures Exchange fell as far as 3,813 yuan ($549) a tonne, before closing down 1.9 percent at 3,838 yuan.
Ahead of the winter limits, China’s crude steel output surged to a record 82.55 million tonnes in October.
Overall steel demand is also slowing with construction activity more scarce over winter, said Lau.
“Any infrastructure projects that will be implemented will have to wait until after the Chinese New Year. You will not see an immediate boost in demand from infrastructure during winter,” she said.
The Lunar New Year falls in early February next year.
Prices of steelmaking raw materials were mixed. Iron ore on the Dalian Commodity Exchange rose 1.6 percent to settle at 527.50 yuan a tonne.
Coking coal eased 0.3 percent to 1,382.50 yuan a tonne, while coke slid 1.9 percent to 2,363 yuan.
Fitch Solutions Macro Research said it has raised its average spot iron ore price forecast for 2019 to $60 a tonne from $54, citing a more expansionary Chinese fiscal policy aimed at cushioning the world’s second-biggest economy from negative effects of a trade war with the United States.
“Our forecasts still mean prices will average lower in 2019 from the current spot level of $73 per tonne, although higher Chinese construction activity as a result of increased approvals of infrastructure projects will prevent any sharp declines in the coming months,” it said in a report on Monday.
$1 = 6.9433 Chinese yuan Reporting by Manolo Serapio Jr., Editing by Joseph Radford and Sherry Jacob-Phillips