* Coking coal recovers as fresh supplies slow to hit market
* Steel, iron ore under pressure
BEIJING Jan 6 Chinese coking coal prices were
higher on Friday, heading for their first weekly rise in more
than a month, amid renewed concerns about lower supplies even as
physical buying remains lacklustre and boosted by renewed gains
in thermal coal.
The most-active coking coal futures on the Dalian
Commodity Exchange were up 1.04 percent at 1,160.5 yuan
($167.96) per tonne. They have gained more than 2 percent so far
this week, their first rise since early December.
Prices have been under pressure since November when they hit
record highs after the government ordered mines to ramp up
output to replenish inventories following closures and cutbacks
earlier in the year that caused shortages.
Fresh supplies have not hit the market as quickly as many
experts had expected.
"Coking coal is still in short supply," even as steel mills
have been operating at lower rates, said Helen Lau, an analyst
with Argonaut Securities in Hong Kong.
Mills typically cut output during the quieter winter months
when construction demand ebbs, while many have curbed output due
to the weeks-long smog alert across northern China.
Steel and iron ore prices remained under pressure on Friday,
as demand remained weak and supplies ample. Steel rebar was on
track to eke out a small gain this week.
The most-active rebar contract for May delivery on the
Shanghai Futures Exchange was down 1.15 percent at
2,919 yuan per tonne.
Iron ore on the Dalian Commodity Exchange resumed
its downward trend, falling 1.2 percent to 542 yuan per tonne on
plentiful supplies and lacklustre seasonal demand. In
mid-December, it touched multi-year highs above 655 yuan per
"Although we expect coal and iron ore prices to fall back
from their recent very high levels, we still expect them to
settle well above the early-2016 lows," HSBC analysts said in a
"That is, we expect that they are past the trough."
Domestic stocks CUS-STKTOT-IORE remain at 2-1/2-year
highs, rising by 90,000 tonnes last week to almost 111 million
Overall optimism about demand in China, the world's top
steelmaker, remains firm after the government confirmed plans to
spend another 800 billion yuan on its metal and steel-intensive
rail network this year.
($1 = 6.9093 Chinese yuan)
(Reporting by Josephine Mason; Editing by Subhranshu Sahu)