October 26, 2018 / 2:36 AM / 8 months ago

Dalian coking coal climbs to 13-month high amid safety checks

* China to roll out coal mine safety check from Oct-Jun, 2019

* Weekly utilisation rate at steel mills at 68.23 pct - Mysteel

* Steel inventory fell to 9.8 mln T - Mysteel

BEIJING, Oct 26 (Reuters) - Chinese coking coal prices jumped to a 13-month high on Friday, spurred by expectations of short supply due to safety inspections at coal mines and firm demand at steel mills.

The most-active coking coal futures on the Dalian Commodity Exchange hit 1,433 yuan ($205.97) a tonne when the market opened, a level last seen in September, 2017. The contract was trading up 2.2 percent at 1,425 yuan a tonne at 0156 GMT.

China’s coal mine safety watchdog said this week it will inspect all mines across the country from late-October to end-June next year in a bid to improve safety conditions.

The move follows a coal mine accident in eastern Shandong province last Sunday that killed eight people. So far, 41 coal mines in the province have been ordered to halt production for security checks.

Prices for coking coal, a key steelmaking raw ingredient, have also been bolstered by strong demand from steel mills racing to churn out more product ahead of winter production cuts.

The weekly utilisation rate of blast furnaces at steel mills across China held above 68 percent in the week to Oct. 26, according to data compiled by consultancy Mysteel. It dipped 0.14 percentage points from a week earlier to 68.23 percent, as steel makers in smog-prone Hebei province were ordered to halve production during an emergency pollution alert.

Prices of other raw materials also rose on Friday. Coke futures rose 1.3 percent to 2,465 yuan a tonne, while iron ore for January delivery edged up 0.1 percent to 532.5 yuan.

Benchmark construction steel rebar on the Shanghai Futures Exchange extended gains for a fifth day to reach a six-week high amid falling inventory. Rebar was up 1 percent at 4,222 yuan a tonne.

According to Mysteel data, weekly stockpiles of steel products at Chinese traders fell 490,700 tonnes to 9.8 million tonnes as of Oct. 26, with rebar inventory dropping 8.2 percent and hot-rolled coil dipping 0.5 percent.

$1 = 6.9573 Chinese yuan renminbi Reporting by Muyu Xu and Dominique Patton; editing by Richard Pullin

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