* Other steelmaking commodities coking coal, coke also off lows
* China's capacity cut campaign to support steel prices - trader (Recasts, updates prices)
By Manolo Serapio Jr
MANILA, Aug 25 (Reuters) - Iron ore and steel futures in China finished weaker but well off session lows on Thursday, backed by view that Beijing's firm resolve to slash excess capacity will keep steel prices supported.
Worries that China may no longer be keen on easing monetary policy as it heads off signs of growing risks in its financial and banking system had dampened sentiment toward commodities and equities. most-active January iron ore on the Dalian Commodity Exchange DCIOcv1 closed down 3 percent at 442 yuan ($66) a tonne, after falling as much as 5.8 percent. The contract touched 460.50 yuan on Wednesday, the highest since August 2014.
On the Shanghai Futures Exchange, construction-used rebar SRBcv1 for January delivery ended 1.1 percent lower at 2,567 yuan per tonne, recovering from the intraday trough of 2,487 yuan.
The outlook for steel prices remains bright, with sentiment supported by China's sustained steps to tackle overcapacity, traders said.
The government has promised to cut steel capacity by 45 million tonnes this year and has achieved 47 percent of that target by end-July. government is taking real action to cut production capacity and this should continue to support steel prices," said a Shanghai-based trader.
With steel margins supported by firmer prices, there should be sustained appetite for raw material iron ore, particularly for imported cargoes as domestic production is limited, the trader said.
"Mills are also looking for high-grade material to boost their steel production," he added.
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI has sustained above $61 a tonne in recent days, standing at $61.50 on Wednesday, nearly flat from Tuesday, according to The Steel Index.
The spot benchmark, which touched a 3-1/2-month high of $61.80 on Aug. 16, has gained more than 43 percent this year to be among the best performing commodities, outpacing oil.
Other steelmaking futures also trimmed intraday losses. Coking coal DJMcv1 ended down 1.4 percent after falling as much as 3.6 percent and coke DCJcv1 closed 1.8 percent lower after sliding 5.5 percent at one point. ($1 = 6.6554 Chinese yuan)