September 27, 2018 / 7:36 AM / 2 months ago

UPDATE 1-Steel, raw material prices drop in China before holiday

* Rebar futures fall to 2-week low, drag down iron ore, coke

* Iron ore hits one-week high before retreating

* Iron ore stocks at China ports lowest since December (Recasts first paragraph, updates prices)

By Manolo Serapio Jr

MANILA, Sept 27 (Reuters) - Chinese rebar steel futures fell more than 1 percent to a two-week low on Thursday, dragging down prices of steelmaking raw materials as activity in China slows down ahead of a week-long holiday.

China’s financial markets will be closed on Oct. 1-5 for the National Day holiday.

The most-active January rebar on the Shanghai Futures Exchange dropped 1.2 percent to close at 4,008 yuan ($583) a tonne, after earlier hitting 3,998 yuan, its weakest since Sept. 12.

Coking coal traded on the Dalian Commodity Exchange fell 1.4 percent to 1,268.50 yuan a tonne and coke slid 2 percent to 2,253.50 yuan.

Steel’s retreat also pushed down iron ore prices.

The most-traded Dalian iron ore contract for January delivery rose as far as 506 yuan a tonne, its loftiest since Sept. 20, before giving up 0.9 percent to settle at 497.50 yuan.

Some pre-holiday restocking activities have helped spur iron ore trading in China, ANZ analysts said in a note.

Iron ore stocked at major Chinese ports stood at 149.1 million tonnes on Sept. 21, the lowest level since December last year, data tracked by SteelHome consultancy showed. SH-TOT-IRONINV

The port inventory hit a record high of 161.98 million tonnes in June.

But there’s “still enough supply to cover demand so iron ore prices are unlikely to increase significantly,” said a Shanghai-based iron ore trader.

“If you look at the medium to long term, there’s no change in iron ore fundamentals.”

Since late March, spot iron ore prices have traded in a tight range between $63 and just below $70 a tonne.

On Wednesday, benchmark spot iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slipped 0.4 percent to $68.96 a tonne, a 1-1/2-week low, according to Metal Bulletin.

$1 = 6.8751 Chinese yuan Reporting by Manolo Serapio Jr.; editing by Richard Pullin and Subhranshu Sahu

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