(Updates prices, adds HSBC comment)
SHANGHAI, July 17 (Reuters) - Chinese rebar futures rose 0.9 percent on Friday but were still down for the seventh week in succession as demand in the world's top producer China waned, with the summer slowdown seeing more mills rein in production.
China's apparent consumption of crude steel is expected to decline further this year as sputtering economic growth hits demand from end users including property and shipbuilding.
The most traded January rebar contract on the Shanghai Futures Exchange SRBcv1 ended the day 2,053 yuan ($330.63) a tonne. It has lost more than 25 percent so far this year.
"Demand from end users remains poor, and the lower production rate is not expected to bolster prices unless it is a big decline that lasts long," said Zhou Zhijun, an analyst with Zhongcai Futures in Shanghai.
According to HSBC Global Research, profitability in the Chinese steel sector is currently at a record low, and destocking pressures are also rising.
It cited data from industry consultancy Mysteel as saying that only 4 percent of Chinese steel mills are now profitable, down from 60 percent in early April.
"We see no upside to steel prices and think (they) will continue to weigh on Chinese mills' margins and returns," HSBC said in a Friday report.
The most active January iron ore contract on the Dalian Commodity Exchange DCIOcv1 gained 0.6 percent to 352 yuan a tonne on Friday. Prices have dropped 27 percent so far this year.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI dipped 0.2 percent to $50 a tonne on Thursday, based on data from The Steel Index. Prices have tumbled 29 percent this year.
Rebar and iron ore prices at 0700 GMT
Contract
Last
Change Pct Change
SHFE REBAR JAN6
2053
+19.00
+0.93
DALIAN IRON ORE DCE DCIO JAN6
352
+2.00
+0.57
THE STEEL INDEX 62 PCT INDEX
50
-0.10
-0.20
METAL BULLETIN INDEX
50.66
+0.11
+0.22
Dalian iron ore and Shanghai rebar in yuan/tonne
Index in dollars/tonne, show close for the previous trading day
($1 = 6.2094 Chinese yuan)