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China coke hits contract high, iron ore slips on supply-related issues

* Dalian coke extends rally on output capacity cuts

* Dalian iron ore retreats after five-session advance

* China iron ore port stocks at 8-1/2-month high - SteelHome

MANILA, Nov 3 (Reuters) - Dalian coke hit a contract high on Tuesday, buoyed by capacity cuts in key producing provinces in China, while iron ore retreated after a five-day rally as port inventories of the steelmaking ingredient climbed to the highest since February.

The most-traded coke contract for January delivery on China’s Dalian Commodity Exchange rose 1.6% to 2,265 yuan ($338.79) a tonne.

The most-active Dalian iron ore contract, also expiring in January, fell 1.1% to 788 yuan a tonne. Iron ore on the Singapore Exchange slumped 1.4% to $112.86 a tonne.

Supply of coke, the processed form of coking or metallurgical coal that is also used in steelmaking, could further tighten as more production capacity cuts are expected in Shanxi province, Sinosteel Futures analysts said in a note.

At the same time, demand for coke remained robust given still-high molten iron output of Chinese steel producers, they said.

“The current output of molten iron is significantly higher than the levels of the same period in previous years,” Sinosteel analysts said.

Dalian coking coal fell as much as 2% to 1,307.50 yuan after a three-day advance.

FUNDAMENTALS

* Imported iron ore stocked at Chinese ports climbed for a sixth consecutive week to 128.95 million tonnes as of Oct. 30, the highest since mid-February, according to SteelHome consultancy. SH-TOT-IRONINV

* Spot iron ore prices stood at $118.50 a tonne on Monday, SteelHome data showed, the strongest since Oct. 22. SH-CCN-IRNOR62

* “The industry had worried that iron ore could be targeted if tensions continue to grow (between China and Australia), but the (Chinese) dependency on iron ore is far higher than it is for copper,” ING commodity strategists wrote in a note.

* Construction steel rebar on the Shanghai Futures Exchange gained 0.2%, while hot-rolled coil slipped 0.2%. Stainless steel lost 1.3%.

Reporting by Enrico Dela Cruz; editing by Uttaresh.V

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