BEIJING - Chinese stainless steel futures shed as much as 4% on Tuesday, following a big drop in prices of its raw material nickel, while poor downstream consumption due to the COVID-19 situation also dented sentiment.

The most-active stainless steel contract on Shanghai Futures Exchange, for June delivery, slipped 1% to 19,310 yuan ($2,958.57) a tonne as of 0317 GMT, after touching 18,720 yuan per tonne earlier during the session.

The current stainless steel market can be described as "high cost, low profit, strong supply, and a with weak demand", Huatai Futures analysts wrote in a note, adding that consumption is sluggish due to the COVID-19 outbreak.

Shanghai nickel futures slid as much as 6.8% to 205,880 yuan a tonne, further weighing on stainless prices.

Other steel products on the Shanghai bourse were range-bound after Monday's plummet, with construction material rebar, for October delivery, dipping 0.1% to 4,858 yuan a tonne.

Hot rolled coils, used in the manufacturing sector, fell 0.6% to 4,934 yuan per tonne.

China's Premier Li Keqiang told a State Council meeting on Monday that the country should watch the economic impact from domestic and external factors that have exceeded expectations, and policy measures need to be implemented in the first half to stabilise prices and economic fundamentals.

Benchmark iron ore futures on the Dalian Commodity Exchange, for September delivery, declined 0.9% to 823 yuan a tonne, extending losses into the third straight session.

Spot prices of iron ore with 62% iron content for delivery to China, compiled by SteelHome consultancy, fell for a fourth consecutive session and stood at $139 a tonne on Monday, the lowest since end-February.

Dalian coke futures fell 0.9% to 3,684 yuan a tonne. Coking coal prices, however, jumped 0.9% to 2,941 yuan per tonne.

(Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; editing by Uttaresh.V)