* Hot rolled coil also retreats further from record high
* Price surge has fueled hesitation among buyers - analyst
By Manolo Serapio Jr
MANILA, Aug 23 (Reuters) - Shanghai rebar steel futures fell almost 2 percent on Thursday as investors locked in gains from a recent rapid climb in prices to a seven-year peak that was driven by China's production curbs aimed at fighting pollution.
Hot rolled coil prices also retreated further from a record high.
The recent rally in steel prices followed market talk last week that Tangshan, the top steelmaking city in China, was considering bringing forward the start of planned winter production cuts by two months to Sept. 1, meaning there would be no gap following summer cuts due to end on Aug. 31.
But Tangshan's Iron and Steel Association and two steel mills in the city told Reuters that they had not been issued such orders by the government.
"We have not had confirmation from local government officials in Tangshan so market sentiment will be quite volatile," said Kevin Bai, analyst at CRU consultancy in Beijing.
"And because prices have increased so dramatically, there has to be some correction."
The most actively traded January rebar on the Shanghai Futures Exchange SRBcv1 was down 1.6 percent at 4,288 yuan ($624) a tonne by 0238 GMT. The construction steel product, which has gained by a quarter this year, touched a seven-year high of 4,418 yuan on Wednesday.
Hot rolled coil, used in manufacturing, SHHCcv1 dropped 1.2 percent to 4,241 yuan per tonne, having hit an all-time high of 4,369 yuan on Tuesday.
"Demand is also relatively low because prices have risen so much, so some end-users have hesitated with their purchases," said Bai.
Prices of steelmaking raw materials also slid.
January coke on the Dalian Commodity Exchange DCJcv1 fell 1.9 percent to 2,563.50 yuan a tonne. The price of the processed form of coking coal, whose production is also covered by China's anti-pollution restrictions, hit a record high of 2,720.50 yuan on Friday. coal DJMcv1 dropped 0.8 percent to 1,321 yuan and iron ore DCIOcv1 slipped 0.3 percent to 492 yuan.
($1 = 6.8740 Chinese yuan)