* Profit-taking drives prices down
* Short-term outlook remains fundamentally positive
* Coal supply shortage is not expected to ease soon
SHANGHAI, Oct 20 (Reuters) - Chinese coking coal futures retreated on Thursday as investors locked in profits after a four-day rally, but the overall outlook remained firm due to the continued supply shortage and strong demand from steelmakers.
Some bulls have cleared their positions after making profits by betting on rising prices. Coking coal futures on the Dalian Commodity Exchange DJMcv1 have surged 43 percent since the end of August and 118 percent year-to-date.
"There is some short-term profit-taking, but the overall market remains positive in the near future as steel mills kept high production and have a strong appetite for coking coal and coke, while the coal shortage is not expected to ease soon," said Bai Jing, an analyst with Galaxy Futures in Beijing.
The January contract slipped 0.7 percent to 1,215 yuan ($180.28) a tonne by the midday break.
China has aimed to cut overcapacity in its coal sector as part of efforts to push supply-side reforms, a move that has unexpectedly resulted in the months-long rally in coal prices and low inventories.
China has ordered major coal mines to raise output since September, but the effort has not been sufficient enough to boost supplies amid strong demand. most active rebar futures on the Shanghai Futures Exchange SRBcv1 edged up 0.4 percent to 2,481 yuan a tonne and iron ore futures on the Dalian Commodity Exchange DCIOcv1 rose 0.8 percent to 445 yuan.
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI stood unchanged at $58 a tonne on Wednesday, according to data from The Steel Index. ($1 = 6.7394 Chinese yuan renminbi)