* Construction steel demand seen picking up
* Steel inventories fall amid output curbs (Updates with closing prices)
By Enrico Dela Cruz
MANILA, March 13 (Reuters) - China’s rebar futures rose on Wednesday as demand for construction steel increased but they ended off the day’s highs, causing a fall in steelmaking raw materials such as iron ore and coke.
The most-active construction steel rebar contract, expiring in May, on the Shanghai Futures Exchange rose for a second day by as much as 1.6 percent to 3,842 yuan ($572.55) a tonne, before ending just 0.2 percent higher at 3,790 yuan.
Hot rolled coil fell 0.5 percent to 3,731 yuan a tonne, after climbing as much as 1.1 percent to 3,793 yuan.
“There’s recovery in end-users’ steel demand, particularly in the construction sector,” said a Beijing-based steel trader. “As a result, stocks at steel mills have declined.”
China’s “weather is getting warmer”, allowing many construction projects, halted in recent months due to cold weather, to resume and new ones to roll out, the trader said.
The peak season for steel products demand in China usually begins in March when the weather gets better after winter.
The May 2019 iron ore contract, the most active on the Dalian Commodity Exchange, had risen as much as 1.7 percent during the day to 616 yuan a tonne, but surrendered its gains to close 0.3 percent lower at 603.5 yuan.
Dalian iron ore has struggled to keep its footing since hitting a record intraday high of 657.5 yuan a tonne on Feb. 12 in the wake of top miner Vale SA’s tailings dam disaster in January.
High prices, steel production restrictions amid China’s anti-smog campaign, and a clouded outlook for steel consumption as China’s economy slows were seen dampening demand for iron ore recently, while inventories continued to rise.
Iron ore prices rebounded on Tuesday, with supply issues back in the spotlight after the town of Mangaratiba in Brazil closed Vale’s Ilha da Guaiba port terminal again due to pollution problems and the alleged lack of an operating licence.
Around 40 million tonnes of iron ore go through the terminal yearly, according to Brazil’s port regulator.
Coking coal edged up 0.3 percent to 1,232 yuan a tonne, but coke ended 0.3 percent lower at 1,985.5 yuan.
($1 = 6.7103 Chinese yuan)
Reporting by Enrico dela Cruz; Editing by Rashmi Aich