Shanghai steel rebar prices fall on worries of rising stockpiles

* Steel stockpiles may continue to rise -analysts

* Steelmaking raw materials prices rise as environmental checks curb output

BEIJING, Oct 8 (Reuters) - Chinese rebar steel prices edged lower on Monday, hit by concerns of a rise in inventories as trading resumed after a week-long national holiday.

Benchmark construction steel rebar prices on the Shanghai Commodity Exchange dipped 0.6 percent to 3,917 yuan ($568.01) a tonne as of 0215 GMT.

However, hot-rolled coil contract rose 0.4 percent to 3,862 yuan, recouping losses earlier in the session.

“Steel demand during national holiday was flat, which indicates stockpiles are likely to continue rising and add pressure to steel prices,” said analysts at Orient Futures in a note.

Consultancy SteelHome and Mysteel did not provide the latest inventory data due to the holiday break. Steel stockpiles held by Chinese traders were at 10 million tonnes on Sept. 28, up from 9.85 million tonnes in the prior week, latest available data from Mysteel showed.

The Purchasing Managers’ Index (PMI) for the steel sector, an indicator showing industrial operations, fell 1.4 percentage points to 52 percent in September amid declining new orders at steel mills, data from the China Federation of Logistics & Purchasing (CFLP) showed on Monday.

“Steel mills still have very strong incentives to ramp up productions amid good weather condition and high steel prices. However, increasing steel prices crimped purchasing intention from downstream sectors,” said CFLP in a statement.

Prices of steelmaking raw materials climbed on Monday as stepped up environmental checks in Shanxi and Shaanxi curbed production activities at coke and coking coal plants in the two northwestern provinces.

China’s environment ministry at a news briefing before the holiday also warned companies across heavy industry not to flout the nation’s tough emission rules despite a ditch of blanket production cuts.

The most-active coking coal prices rose 2.3 percent to 1,287 yuan a tonne. Coke contract for January delivery gained 1.4 percent to 2,268 yuan.

Iron ore futures on the Dalian Commodity Exchange edged down 0.1 percent to 492.5 yuan a tonne.

$1 = 6.8960 Chinese yuan Reporting by Muyu Xu and Dominique Patton; Editing by Amrutha Gayathri