* Rebar, coking coal post biggest weekly gains this year
* China manufacturing sector growth steady - Caixin PMI (Updates prices)
By Manolo Serapio Jr
MANILA, June 1 (Reuters) - China’s rebar steel futures climbed to their strongest in nearly three months on Friday as falling stockpiles pointed to firm demand in the world’s top user, helping rebar and raw material coking coal mark their best week this year.
Inventories of construction steel product rebar at Chinese traders have fallen more than 40 percent from March while stocks of hot rolled coil, used in manufacturing, have dropped 76 percent, according to data tracked by SteelHome consultancy.
Data showing China’s manufacturing growth was steady last month also supported sentiment, countering fears of a global trade war after Canada and Mexico retaliated against a U.S. decision to impose tariffs on steel and aluminium imports.
The most-active October rebar on the Shanghai Futures Exchange closed up 1.7 percent at 3,734 yuan ($582) a tonne, after hitting 3,778 yuan intraday, its loftiest since March 7. It gained 4.3 percent for the week.
Rebar stocks at Chinese traders reached 5.65 million tonnes last week, down 42 percent from a five-year high in mid-March, SteelHome data showed. SH-TOT-RBARINV
Inventories of hot rolled coil, at 2.12 million tonnes last week, have dropped much more sharply, from nearly 9 million tonnes in early March, the data showed. SH-TOT-HRCLINV
But CRU analyst Richard Lu in Beijing said the recent strength in steel prices may have more to do with continued supply curbs in certain Chinese cities as part of anti-pollution measures, such as in Handan.
“We think the recent price increase was associated with supply concerns since some regions have continued to implement production restrictions and some mills have gone on maintenance since mid-May,” said Lu.
“China’s domestic steel market is currently struggling with supply tightness as a new round of environmental protection investigation which will last for one month has just started,” said Helen Lau, analyst at Argonaut Securities.
There was no impact from Thursday’s U.S. decision to go ahead with imposing 25 percent tariffs on steel imports from allies Canada, Mexico and the European Union. Washington imposed the tariffs on steel from China, along with a 10 percent duty on aluminium imports, in March.
Direct Chinese steel exports to the United States reached less than 400,000 tonnes last year, a fraction of China’s total shipments of 75.4 million tonnes.
Coking coal futures on the Dalian Commodity Exchange jumped 2.1 percent to 1,253 yuan a tonne, gaining 5 percent for the week. Iron ore eased 0.3 percent to 460 yuan and coke added 0.4 percent to 2,081 yuan.
Spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB eased 0.7 percent to $65.32 a tonne on Thursday, according to Metal Bulletin. ($1 = 6.4111 Chinese yuan) (Reporting by Manolo Serapio Jr.; editing by Richard Pullin and Subhranshu Sahu)