* Many traders already away ahead of Lunar New Year
* Dalian iron ore has fallen nearly 9 pct from 3-year high (Adds China stock index, updates prices)
By Manolo Serapio Jr
MANILA, Jan 23 (Reuters) - Iron ore and steel futures in China fell for a fourth session on Monday, with appetite for trading slim as many market participants are already away ahead of the Lunar New Year holiday.
Chinese markets will be shut for a week from Friday.
"Everyone's off already," said a trader in Singapore, adding that activity in the physical market was also slow.
"But we are seeing outflow of money from commodities to equities. Transacting commodities futures in China is high-cost and high-margin and the government is relaxing requirements on equities futures," he said.
China's exchanges hiked fees and trading margins on many commodities including steel and iron ore last year following wild price swings. most-active rebar on the Shanghai Futures Exchange SRBcv1 closed down 2.2 percent at 3,180 yuan ($464) a tonne.
Iron ore on the Dalian Commodity Exchange DCIOcv1 dropped 3.1 percent to 607.50 yuan per tonne. The steelmaking raw material has fallen almost 9 percent from a three-year high reached last week.
China's main stock index ended at a two-week high. .SS
Iron ore had benefited from this month's surge in steel prices as China boosted efforts to tackle a glut, recently aiming to shut producers of substandard steel by the end of June.
China asked local authorities to submit a list of these producers by Jan. 20, with details of specific measures and a timetable for phasing out production. continued weakness in futures could further drag down spot iron ore prices.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.7 percent to $80.41 a tonne on Friday, easing for a second day in a row, according to Metal Bulletin.
($1 = 6.8557 Chinese yuan)