Chinese steel futures edged lower for an eighth session in a row on Friday, but prices were still on course for a fifth straight monthly increase thanks to Beijing's war on smog that has tightened supply in the world's top producer. Weighing on overall sentiment on Friday was a report that US President Donald Trump is prepared to quickly ramp up a trade war with China, telling aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week. The most actively traded January rebar on the Shanghai Futures Exchange was off 0.5 percent at 4,110 yuan ($602) a tonne by 0140 GMT. But the construction steel product has still gained 3 percent so far in August, having surged to a seven-year peak of 4,418 yuan last week. Production limits imposed by Chinese cities including top producing Tangshan in line with the national government's campaign to limit pollution has helped cap available supply. The curbs are set to continue in winter when China implements restrictions on industrial production for the second year in a row. "Continuous and strict environmental protection measures limit the potential for the rebound of production," Morgan Stanley analysts said in a note to clients. Rebar stockpiles at Chinese traders stood at 4.12 million tonnes last week, not far above a six-month low of 4.09 million tonnes reached in mid-August, according to data tracked by SteelHome consultancy. &lt;SH- Morgan Stanley said total steel inventory in China declined slightly again this week ahead of the peak season for steel demand that follows summer. Iron ore on the Dalian Commodity Exchange rose 1.1 percent to 486.50 yuan a tonne, after touching a nearly six-week low of 476 yuan on Thursday. Coking coal was steady at 1,248 yuan. Coke fell 2.5 percent to 2,439.50 yuan per tonne, adding to the previous session's 5.3-percent slide that followed a rally earlier this month to a record 2,720.50 yuan. Spot iron ore for delivery to China's Qingdao port &lt;.IO62-CNO=MB&gt; fell 2.2 percent to $65.87 a tonne on Thursday, according to Metal Bulletin. The spot benchmark has lost 3.4 percent so far this month.