October 24, 2018 / 2:35 AM / 9 months ago

China Dalian coke rises on tight supply concerns

* Linfen city mulls to enforce winter restriction

* Around 5,200 tonnes coke output may be cut -analysts

BEIJING, Oct 24 (Reuters) - The Dalian price of steelmaking raw ingredient coke rose on Wednesday, on track for it strongest day in nearly two weeks, as investors worry about tight supply amid anti-pollution measures in northwestern China.

Linfen city in coal-mining hub Shanxi province may enforce production restrictions for heavy industry, including coke, steel, coal-fired power, casting, chemicals and building materials sectors, from mid-November until mid-March next year, the state-backed China Environment News reported.

Industrial plants that fail to meet certain emission standards will be ordered to halve their production or even shut.

Linfen’s policy would reduce daily coke output by around 5,200 tonnes, said analysts from Huatai futures in a note, citing an estimate by consultancy Mysteel.

The most-active coke futures on the Dalian Commodity Exchange rose 1.5 percent to 2,407.5 yuan ($347.08) a tonne as of 0157 GMT, on course for their best performance since Oct. 12.

Some coke producers hiked physical prices by 50-100 yuan a tonne in northern China this week, which has also helped to drive up futures prices.

Dalian coking coal edged up 0.1 percent to 1,382 yuan a tonne, after a coal mining accident in eastern Shandong province on Monday that killed three people and led to the temporary closure of 41 mines.

The benchmark steel rebar contract on the Shanghai Futures Exchange was little changed at 4,162 yuan. Trading volumes in the previous session fell to a two-week low, as investors take a cautious stance ahead of more information about winter production curbs across the country.

China allowed local governments to set their own winter production restrictions this year, ditching last year’s blanket limits.

Anhui province in China’s manufacturing hub Yangtze River Delta said on the provincial government’s website that it would introduce anti-smog measures during the winter season as part of efforts to improve air quality, but did not give details for individual producers.

The most-traded iron ore contract for January delivery on the Dalian exchange edged up 0.3 percent to 524 yuan a tonne. ($1 = 6.9364 Chinese yuan renminbi) (Reporting by Muyu Xu and Dominique Patton; editing by Richard Pullin)

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