UPDATE 1-China iron ore futures fall on easing steel demand

* Iron ore futures down as much as 3.6%

* Spot 62% iron ore fall to $113 per tonne

* Shanghai steel rebar, HRC prices down (Adds details; updates with closing prices)

BEIJING, July 24 (Reuters) - China iron ore futures dropped as much as 3.6% on Friday, falling for a second straight session, as demand for steel products slipped this week on lean downstream consumption.

China’s steel product demand dipped 1.3% this week from a week earlier, according to Reuters calculations based on steel production and inventory data from Mysteel consultancy.

The most-active September contract for iron ore, the key steelmaking ingredient, on the Dalian Commodity Exchange closed down 2.1% to 828 yuan ($117.93) per tonne. It gained 0.2% this week.

“Robust demand and supply side issues have helped push (iron ore) prices above $100/t for the first time in 12 months,” ANZ Research analysts wrote in a note. “However, we see a disconnect between iron ore and steel markets, which could see prices fall fast if sentiment changes suddenly.”

Steel rebar prices on the Shanghai Futures Exchange , for October delivery, fell 1.1% to 3,747 yuan a tonne and hot-rolled coils ended down 1.1% to 3,767 yuan a tonne.

Total stockpiles of five main steel products at mills and held by traders stood at 22 million tonnes as of July 22, up 1.7% from the week earlier, according to Mysteel, logging the fifth straight weekly gain.

Stocks of steel rebar had jumped 13% in the past five weeks as demand dented by slowing construction activities due to floods and heat.

ANZ Research added that Chinese steelmakers would lower production in the second half of the year to protect steel margins. “This will ultimately hurt iron ore prices.”


* Spot prices for iron ore with 62% iron content for delivery to China, assessed by consultancy SteelHome, fell by $0.5 to $113 per tonne on Thursday from the previous session. SH-CCN-IRNOR62

* Stainless steel futures rose 2.1% to 13,690 yuan a tonne.

* Dalian coking coal gained 0.7% to 1,237 yaun and coke fell 0.6% to 1,979 yuan per tonne. ($1 = 7.0210 Chinese yuan renminbi) (Reporting by Min Zhang and Tom Daly; editing by Uttaresh.V and Rashmi Aich)