* Coking coal rallies for sixth session
* Coke futures also hit contract high
* Australia seeks response from China
MANILA, Oct 13 (Reuters) - Dalian coking coal futures rallied for a sixth straight session and hit a contract high on Tuesday after reports that China had stopped buying coal from Australia.
The most-active coking coal contract on China’s Dalian Commodity Exchange rose as much as 3.3%, to 1,373 yuan ($203.36) a tonne in early trade.
Coke futures extended gains for a fifth session, rising as much as 2.7% and hitting a contract-high 2,127.50 yuan a tonne. Coke, the processed form of coking coal, is the primary reducing agent of iron ore, the main steelmaking raw material.
Australia is investigating media reports that China has banned its thermal and metallurgical coal, Australia’s trade minister said, while playing down a potential sign of escalating trade tensions between the two countries.
Analysts at Sinosteel Futures Co Ltd in Beijing said the reported ban was first discussed at an industry conference in China last month.
Chinese steel mills’ reaction to the news seemed to be somewhat muted as the country’s import quota for Australian coal is “already tight”, they said.
Australia has sought a response from China, Trade Minister Simon Birmingham said, while noting that coal flows to the country had been disrupted in recent years partly because of Chinese “domestic factors”.
China has had resorted to coal import curbs to boost domestic prices.
“The uncertainty (over China’s coal import policy) still exists,” Sinosteel analysts said in a note.
Although the spotlight in China’s ferrous metals market has turned to coking coal and coke, iron ore traded lower on easing supply concerns.
Iron ore’s Dalian benchmark slumped 0.8% a tonne by 0320 GMT. Iron ore on the Singapore Exchange fell 1.4% to $117.87 a tonne.
Construction steel rebar on the Shanghai Futures Exchange dropped 0.2%, while hot-rolled coil slipped 0.1%. Stainless steel lost 1.2%.
($1 = 6.7517 Chinese yuan renminbi)
Reporting by Enrico Dela Cruz. Editing by Gerry Doyle
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