MANILA, Sept 11 (Reuters) – Chinese rebar steel futures fell more than 2 percent and coke prices dropped over 3 percent on Tuesday after a source, involved with the plan, said the environment ministry is planning to allow provinces to set rules on production cuts. China’s environment ministry is mulling to drop a requirement for provinces to set specific production curbs for heavy industry during the winter heating season, allowing for a more flexible implementation of the anti-smog policy, the source said. Under a draft plan released last month, Beijing was considering to impose 50 percent cuts on steel production and 30 percent on primary aluminium production in some regions. The most actively traded rebar for January delivery on the Shanghai Futures Exchange was down 2.2 percent at 4,161 yuan ($606) a tonne by midday break. Hot rolled coil futures dropped 2.6 percent to 4,051 yuan a tonne, on track for their steepest single-day fall since late March. Market sentiment toward China’s production cuts, which had largely spurred the rise in steel prices on account of tighter supply, is starting to get mixed, said Kevin Bai, analyst at CRU consultancy in Beijing. “Some people think the government is quite strict on environment protection rules, while others say the air quality is quite good so probably the government will ease on the restrictions,” Bai added. Coke on the Dalian Commodity Exchange slid 3.5 percent to 2,308.50 yuan a tonne, having touched a five-week low of 2,290 yuan earlier in the session. Coking coal was steady at 1,293.50 yuan. Iron ore futures slipped 0.7 percent to 494.50 yuan per tonne. Spot iron ore for delivery to China’s Qingdao port dropped 1 percent to $67.81 a tonne on Monday, following a four-day rise, according to Metal Bulletin.