* Shanghai steel benchmarks down nearly 3% by midday
* Dalian, Singapore iron ore futures fall further
* China housing market set to slow this yr - poll
By Enrico Dela Cruz
MANILA, Aug 27 (Reuters) - Chinese steel futures fell on Tuesday, with the hot-rolled coil benchmark hitting its lowest in more than two weeks, as a selloff continued on worries about a prolonged weakness in demand for the construction and manufacturing material.
The most-traded contract for hot-rolled coil SHHCcv1 , steel used in cars and home appliances, dropped as much as 3.3% on the Shanghai Futures Exchange to 3,561 yuan ($502.06) a tonne, its weakest since Aug. 9.
The most-active construction steel rebar contract SRBcv1 , slipped as much as 2.9% to 3,308 yuan a tonne, its lowest since Aug. 12.
The Shanghai benchmarks have tumbled around 10 percent since July, pressured by seasonally weak demand and with the outlook for steel consumption clouded by the U.S.-China trade war.
The selloff continued despite U.S. President Donald Trump's prediction on Monday of a trade deal with China following positive gestures by Beijing, which helped restore investor confidence after Monday's rout in global markets. is still "a degree of scepticism regarding the likelihood of any concrete near-term progress" in the U.S.-China trade talks, ANZ Research said.
The trade war between the world's two largest economies has damaged global growth and its escalation last Friday following their latest tit-for-tat tariff actions had fuelled fears the world economy could slip into recession.
The downbeat outlook for steel demand dragged prices of steelmaking raw materials lower, including iron ore.
The most-traded January 2020 iron ore on the Dalian Commodity Exchange DCIOcv1 was down 2.4% at 590 yuan a tonne by the midday break, and has sunk 15.4% this quarter, after five consecutive quarterly gains.
"Coupled with the slowing steel market, an unexpected surge in (China's) iron ore imports in July and increase in port inventory crushed iron ore prices," said Helen Lau, analyst at Argonaut Securities in Hong Kong.
FUNDAMENTALS
* Benchmark 62% iron ore for delivery to China SH-CCN-IRNOR62 , as assessed by SteelHome consultancy, rebounded to $87.50 a tonne on Monday, after hitting its lowest in nearly five months at $86.50 last week.
* In the Singapore Exchange, the front-month September 2019 iron ore contract was down 1.4% at $82.50 in late morning trade.
* Imported iron ore inventory at China's ports rose steadily for six straight weeks, hitting 124.65 million tonnes, as of Friday SH-TOT-IRONINV , data from SteelHome showed, the highest since the end of May this year.
* Coking coal futures DJMcv1 were down 1.2% at 1,299 yuan a tonne by midday break while coke DCJcv1 fell 2% to 1,871.50 yuan.
* China's housing market is expected to slow this year with sales forecast to drop, as Beijing steps up efforts to scrutinise banks and provincial governments to keep a lid on lending and prices, a Reuters poll showed. For the top stories metals and other news, click TOP/MTL or MET/L
($1 = 7.0928 yuan)