* Construction steel demand seen picking up
* Steel inventories fall amid output curbs
By Enrico Dela Cruz
MANILA, March 13 (Reuters) - Benchmark rebar and iron ore contracts in China rose on Wednesday, buoyed by increased demand for both steel and steelmaking raw materials as construction activities in the country start picking up.
The most-active construction steel rebar contract, with May expiry, on the Shanghai Futures Exchange SRBcv1 , rose for a second day by as much as 1.6 percent to 3,842 yuan ($573.04) a tonne.
Hot rolled coil SHHCv1 climbed as much as 1.1 percent to 3,793 yuan a tonne.
"There's recovery in end-users' steel demand, particularly in the construction sector," said a Beijing-based steel trader. "As a result, stocks at steel mills have declined."
China's "weather is getting warmer", allowing many construction projects, halted in recent months due to cold weather, to resume and new ones to roll out, the trader said.
The peak season for steel products demand in China usually begins in March when the weather gets better.
The May 2019 iron ore contract, the most active on the Dalian Commodity Exchange DCIOcv1 , rose as much as 1.7 percent to 616 yuan a tonne.
Supply-side issues were also seen supporting Dalian iron ore, which have been choppy since hitting a record intraday high of 657.5 yuan a tonne on Feb. 12 in the wake of top miner Vale SA's VALE3.SA tailings dam disaster in January.
High prices and restrictions on China's steel production aimed at tackling air pollution were seen dampening demand for iron ore recently, while inventories at Chinese ports continued to rise.
Iron ore prices rebounded with a modest gain on Tuesday, with supply issues also providing some support. The town of Mangaratiba, in Brazil's Rio de Janeiro state, closed Vale's Ilha da Guaiba port terminal again due to pollution problems and the alleged lack of an operating licence. 40 million tonnes of iron ore go through the terminal yearly, according to Brazil's port regulator.
Coking coal DJMcv1 edged up 0.9 percent to 1,239.5 yuan a tonne, and coke DCJcv1 rose 1.4 percent to 2,020 yuan.
($1 = 6.7046 Chinese yuan)