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UPDATE 1-Dalian coking coal, coke futures tumble as China steel profit margins slump

(Adds details; Updates closing prices)

BEIJING, Feb 22 (Reuters) - Coking coal and coke futures on the Dalian Commodity Exchange plunged on Monday, as some mills attempt to lower purchase prices of the steelmaking ingredients due to tight steel profit margins in China.

“The uneven profit distribution is the main drive for steel producers to crack down coke prices,” Sinosteel wrote in a note, adding that profit at sample coking plants were at historical highs last week while raw material costs for blast furnaces continue to climb.

The most actively traded coking coal futures, for May delivery, slumped nearly 6% to 1,487 yuan ($230.07) per tonne and closed down 4.8%.

Coke futures were down as much as 4.7%, the biggest daily percentage loss since Jan. 12. It ended 4% lower at 2,617 yuan per tonne.

Benchmark iron ore futures on the Dalian bourse, meanwhile, jumped on demand hopes after the Spring Festival holidays. They ended up 1.7% at 1,139 yuan per tonne.

Capacity utilisation rates at 247 blast furnaces across China rose to 92.19%, as of Feb. 19, from 90.94% before the Lunar New Year holidays, according to Mysteel consultancy.

Prices for spot iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62, compiled by SteelHome consultancy, stood at $173 per tonne on Friday.

Steel prices on the Shanghai Futures Exchange advanced.

Most-traded construction rebar gained 1.1% to 4,582 yuan a tonne.

Hot-rolled coil, used in the manufacturing sector, jumped 2.7% to 4,822 yuan per tonne.

Stainless steel futures, for April delivery, increased 1.2% to 15,280 yuan per tonne at close.

FUNDAMENTALS

* Coking coal inventories at coking plants and steel mills fell by 6.8% last week from pre-holiday levels to 18.48 million tonnes, Mysteel data showed.

* Japan’s crude steel output fell 3.9% in January from a year earlier, dropping for the eleventh consecutive month as the pandemic continued to dent demand. ($1 = 6.4632 Chinese yuan renminbi) (Reporting by Min Zhang and Shivani Singh, Editing by Sherry Jacob-Phillips)

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