* Coking coal supply shortage fuels prices
* Supply not expected to be boosted in short-term
* Rising raw material costs lift steel prices
SHANGHAI, Oct 24 (Reuters) - Chinese coking coal and coke futures extended gains on Monday after capacity cuts in the country hit production, with a severe supply shortage expected to continue in the coming months.
As part of its supply-side reform, China has vowed to slash overcapacity in the coal sector that has dragged miners into severe losses over the last few years.
But measures this year such as shutting down unqualified mines and cutting working days at mines have unexpectedly fueled an extreme shortage of coal supply, in turn raising prices for steel.
"Coking coal supply is extremely short and higher prices have driven steel prices. Steel demand is pretty firm at the moment, so I don't expect steel prices to fall in the near future," said Li Wenjing, an analyst with Industrial Futures in Shanghai.
The most active coking coal futures on the Dalian Commodity Exchange DJMcv1 had climbed 1.2 percent to 1,226 yuan ($180.99) a tonne by the midday break. They have surged 43 percent since the end of August.
Dalian coke futures DCJcv1 had gained 1.6 percent to 1,561.6 yuan a tonne and iron ore futures DCIOcv1 had advanced 1.1 percent to 445 yuan a tonne by the midday break. Coke has risen 28 percent since the end of August.
The most active rebar futures on the Shanghai Futures Exchange SRBcv1 edged up 0.2 percent to 2,469 yuan a tonne.
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI stood steady at $58.40 a tonne on Friday from the previous session, according to data from The Steel Index.
($1 = 6.7737 Chinese yuan renminbi)