* Iron ore futures fall 3.4 pct in the week
* Shanghai rebar futures drop 1.6 pct; 1st weekly fall in 5
* More steel output cuts expected
* Slowing economy, tougher environment measures to hit output (Updates close prices)
SHANGHAI, Jan 8 (Reuters) - Chinese iron ore futures slumped over 2 percent to their lowest in more than a week as steel output cutbacks in the world's top producer are expected to pick up this year, hitting demand for the steel-making ingredient.
The most active iron ore futures on the Dalian Commodity Exchange DCIOcv1 dropped to a session low of 310.5 yuan ($47.13) a tonne, the lowest since Dec. 29, before closing 2.7 percent down at 311.5 yuan.
Iron ore fell 3.4 percent this week, the first weekly fall in four.
The persistent slowdown in the Chinese economy and tougher environmental checks are expected to force Chinese steel mills to further rein in output this year.
"Iron ore demand from China will fall this year, while supply from Australia and Brazil remains overwhelming. Port stocks keep rising as steel mills don't buy," said an iron ore trader in Beijing.
Tangshan city in northern China's Hebei province, the country's largest steel producing region, is scheduled to host an international horticultural exposition between April 29 and Oct. 16. During the period, authorities are expected to order steel mills in the region to slash production to reduce air pollution, further hitting iron ore demand.
Spot iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI fell for a third straight day, down 0.5 percent to $41.70 a tonne on Thursday, according to The Steel Index (TSI).
On the Shanghai Futures Exchange, the most traded rebar futures SRBcv1 stretched losses, dropped 1 percent to 1,759 yuan a tonne by close. It ended the week down by 1.6 percent, the first weekly fall in five.
Rebar and iron ore prices at 0700 GMT
Contract
Last
Change Pct Change
SHFE REBAR MAY6
1759
-17.00
-0.96
DALIAN IRON ORE DCE DCIO MAY6
311.5
-8.50
-2.66
THE STEEL INDEX 62 PCT INDEX
41.7
-0.20
-0.48
METAL BULLETIN INDEX
42.65
-0.26
-0.61
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.5875 Chinese yuan renminbi)