* Steel rebar futures rise for the sixth session
* Coking coal rallies, up over 4 pct
* Short-term outlook remains firm
* Healthy steel demand and strong coking coal lift sentiment (Updates close prices)
SHANGHAI, Oct 18 (Reuters) - Chinese steel futures rose for the sixth straight session on Tuesday as healthy demand and higher prices of raw materials supported prices.
Steel rebar futures had climbed 9 percent from October 10 until Monday’s session, largely because supply shortage of steelmaking raw materials raised production cost for mills in the world’s top steel producer.
“The severe shortage of coking coal and coke has forced a few mills, far away from coal production bases to cut production, and others will not raise output either due to raw materials shortage and losses,” said Zhao Chaoyue, an analyst with Merchant Futures in Shenzhen.
“The whole market is watching the shortage of coal and coke which should support steel prices in short term. However, steel demand sets to weaken from mid-November and steel mills might cut output further, which could reduce appetite for coal.”
Though steel demand would not be strong enough to justify the recent rally, Zhao remained firm on the short-term outlook.
Steel demand normally weakens in northern regions from mid-November as freezing weather hits construction activities - the main consumer of steel products.
The most active rebar futures on the Shanghai Futures Exchange edged up 0.6 percent to 2,441 yuan($366.05) a tonne.
Iron ore futures on the Dalian Commodity Exchange dropped 0.7 percent to 437.50 yuan a tonne by close.
Dalian coking coal futures surged 4.3 percent to 1,180.50 yuan a tonne, the highest since the bourse launched the contract in 2015. Coke jumped 1.6 percent to 1,497.5 yuan a tonne, the strongest since early 2014.
Iron ore for delivery to China’s Tianjin port .IO62-CNI=SI rose 1.8 percent to $57.80 a tonne on Monday, its largest gain since October 10, according to data from The Steel Index. ($1 = 6.6685 Chinese yuan renminbi) (Reporting by Ruby Lian; Editing by Christian Schmollinger and Vyas Mohan)