* Dalian, SGX iron ore hit weakest in two weeks
* Dalian coke, coking coal touch six-week lows
* China steel imports to rise in 2021 - group (Updates prices, adds graphic)
By Enrico Dela Cruz
Jan 27 (Reuters) - China's iron ore futures dipped on Wednesday, weighed down by concerns over a likely reduction in output by steel mills hit by losses due to high production costs and weak demand.
Shrinking steel profit margins in the world's top producer of the construction and manufacturing material may force mills to put their facilities under maintenance, reducing demand for iron ore and other raw materials, analysts said.
The most-active May iron ore contract on China's Dalian Commodity Exchange DCIOcv1 ended daytime trading 0.2% lower at 1,041.50 yuan ($161.11) a tonne, after earlier hitting a two-week low of 1,015.50 yuan.
Spot iron ore in China traded at $167.50 a tonne on Tuesday, the weakest since Jan. 4, according to SteelHome consultancy. SH-CCN-IRNOR62
Iron ore's February contract on the Singapore Exchange SZZFG1 rose 0.7% to $163.20 a tonne by 0715 GMT, reversing early losses.
Dalian coking coal DJMcv1 slumped 1.1% while coke DCJcv1 lost 1%, after both touched six-week lows early in the session.
As a result of a sharp rise in production costs and weak steel demand, "steel companies in the north have already suffered large-scale losses", Sinosteel Futures analysts said in a note.
"Market demand for raw materials is expected to deteriorate further in the near future," Sinosteel analysts said, also citing the impact of ongoing restrictions in China to curb rising COVID-19 cases and the approaching Lunar New Year holidays.
Prices of key input iron ore remain elevated after last year's spikes driven by robust demand in China, which produced a record-high volume of steel despite the pandemic. brisk output at home, China's steel imports in 2021 were expected to rise as domestic demand remains strong, supported by stable macroeconomic policies, an industry group said, lending support to steel prices. on the Shanghai Futures Exchange SRBcv1 rose 1.4%, while hot-rolled coil SHHCcv1 climbed 1.8%. Stainless steel SHSScv1 fell 0.9%.
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https://tmsnrt.rs/3iUeOOH
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