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UPDATE 1-Shanghai rebar steel prices hit 7-yr high on supply fears

* Rebar prices rise on market chatter over production curbs

* But steel officials say have not been told of new cuts by govt

* Higher coke prices prompt hoarding (Adds detail, updates prices)

BEIJING, Aug 20 (Reuters) - Prices in China for rebar construction steel on Monday hit their highest in nearly seven years, boosted by concerns over tight supply.

Prices were buoyed by market chatter on Monday afternoon that mills in Jiangsu, China’s No.2 steelmaking province, could face tighter environmental inspections and be forced to cut output by half in November when an international trade fair is held in a nearby region.

However, an official at Jiangsu’s Iron and Steel Association and two steel mills in Jiangsu province told Reuters they had not received notice of any such moves from the government.

That followed market talk on Friday that Tangshan, the top steelmaking city in China, is considering bringing forward the start of planned winter production cuts by two months to Sept. 1, meaning there would be no gap between those and summer cuts due to end on Aug. 31.

However, Tangshan’s Iron and Steel Association and two steel mills in the city told Reuters that the government had not issued such orders to them.

The smog-blanketed city was identified as one of the most polluted cities among 169 regions monitored by the environmental ministry in July.

“Some mills are carrying out even bigger rates of capacity cutting than the level the government requested (over the summer). We expect the production restrictions will not be lifted even after summer ends,” said a Tangshan-based steel trader. He declined to be identified as he was not authorised to speak with media.

Benchmark Shanghai rebar prices on Monday surged as much as 4.5 percent to 4,413 yuan ($641.98) a tonne, their highest since late-September in 2011.

The most-active hot-rolled coil on the Shanghai Futures Exchange hit an all-time high of 4,337 yuan before closing at 4,324 yuan on Monday.

Weekly stockpiles of steel products in China had added 74,600 tonnes to 10.07 million tonnes as of Friday, data from consultancy Mysteel showed, with rebar stocks increasing 0.1 percent and hot-rolled coil stocks rising 0.8 percent.

Utilisation rates at steel mills across the country last week stayed at the same level as the week before at 66.16 percent, Mysteel data showed.

Meanwhile, prices for steelmaking raw materials also climbed on Monday alongside steel products.

The most-active coking coal on the Dalian Commodity Exchange closed up 3 percent at 1,328 yuan a tonne, after earlier touching its strongest since mid-June at 1,341 yuan.

Coke prices continued to rise on Monday after surging nearly 8 percent to a record-high in the previous trading session. They were up 1.5 percent at 2,669 yuan a tonne when the market closed at 0700 GMT.

The rally in coke prices has prompted traders in the world’s top producer to hoard stocks amid fears of further production curbs and forced some exporters to stop shipping out the steelmaking ingredient.

Spot coke prices have surged 300 yuan since the beginning of August when regional environmental checks started in the major coke producing province of Shanxi. On Monday, some coke plants added another 100 yuan to physical prices to 2,550 yuan a tonne, according to industry sources.

Dalian iron ore prices rose 1.7 percent to 506.5 yuan a tonne. ($1 = 6.8740 Chinese yuan renminbi) (Reporting by Muyu Xu and Josephine Mason Editing by Vyas Mohan and Joseph Radford)

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