* Weaker steel demand drives down steel prices
* Futures for steel raw materials mixed in morning trade
SHANGHAI, Dec 13 (Reuters) - Chinese steel futures drop on Wednesday as physical market slows amid cooling demand.
The most active rebar on the Shanghai Futures Exchange had fallen 1.6 percent to 3,864 yuan ($583.83) a tonne by the midday break.
Steel demand in China, the world’s top producer and consumer of the material, tapers off in winter as low temperatures curb construction in northern regions. The construction sector is the nation’s biggest steel user.
“The turning point for steel prices has come now. Physical market activity has slowed down due to the seasonal weakness in demand,” said Cao Ying, an analyst with SDIC Essence Futures in Beijing.
“However, I am not too bearish on steel prices as inventories stand at historical low levels. If prices tumble, there will be restocking demand.”
China has pledged to cut air pollution and ordered steel mills in 28 cities to curb output, leading to tighter supplies and low inventories that helped pushed spot prices to a nine-year high at the start of this month.
On the Dalian Commodity Exchange, raw materials prices were mixed in early trade.
Iron ore edged up 0.9 percent to 507 yuan a tonne and coking coal rose 1.1 percent to 1,293.5 yuan.
Coke dropped 1 percent to 2,089.5 yuan a tonne.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB jumped 3.5 percent to $71.25 a tonne, according to Metal Bulletin. ($1 = 6.6184 Chinese yuan renminbi) (Reporting by Ruby Lian and Josephine Mason; Editing by Joseph Radford)
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