* Coking coal rises for 2nd day, up 11% this year
* Iron ore up 1.2%, rebounding from early losses
* Fortescue flags stronger iron ore shipments in 2020
* Shanghai steel rebar climbs 1% after 6-day slide
(Updates with closing prices, more comment, graphic)
By Enrico Dela Cruz
MANILA, July 25 (Reuters) - Coking coal futures in China edged higher on Thursday on expectations that spot prices of the steelmaking raw material will remain strong, supported by brisk demand as the world's largest steel producer ramps up output.
The most-active September coking coal contract on the Dalian Commodity Exchange DJMcv1 ended 0.6% firmer at 1,409 yuan a tonne. The index has gained 11% this year.
Coke DCJcv1 , the processed form of coking coal, climbed 0.7% to 2,139 yuan a tonne.
Prices of spot and imported coking coal in China have weakened over the past month by around 6%-7% due to rising inventory and robust imports of the material, said Helen Lau, metals and mining analyst at Argonaut Securities in Hong Kong.
Coking coal inventory across ports in China stood at 5.73 million tonnes, as of July 19, up 36% from a year ago and 107% this year, she said, while news of renewed audits on anti-pollution measures by mills also weighed on coking coal.
However, prices had stabilised, helped by a switch to lower-priced coking coal to improve steel margins, said Lau.
"Overall, we expect ... prices to stay high after September on increased steel production," she said.
FUNDAMENTALS
* The most-traded Dalian iron ore DCIOcv1 , for September delivery, reversed earlier and rose 1.2% to 871.50 yuan a tonne, closing firmer for the first time in four sessions. The index is down 4.1% so far this week.
* Benchmark spot 62% iron ore SH-CCN-IRNOR62 for delivery to China, fell 2.9% to $116 a tonne on Wednesday, data from SteelHome consultancy showed.
* "Iron ore has seen a steep selloff this week as market sentiment shifts following a run of bearish indicators, with port holdings in China building up, mills' profitability slipping, steel inventories rising, and predictions for lower iron prices stacking up," SP Angel analysts said in a note.
* Australia's Fortescue Metals Group FMG.AX reported record quarterly iron ore shipments on Thursday, boosting its sales as prices spiked to five-year highs, and forecast stronger shipments in the coming year. The most-active construction steel rebar contract on the Shanghai Futures Exchange SRBcv1 closed 1.0% higher at 3,940 yuan a tonne, rebounding from a six-session slump. Hot-rolled steel SHHCcv1 used in cars and home appliances climbed 1.0% to 3,866 yuan.
* Despite Thursday's gains, China's ferrous derivatives complex is mostly down this week and the weakness could last until early August, according to Singapore-based data analytics firm Tivlon Technologies.
* "This weakness is mainly driven by (traders) shifting their positions out from expiring futures contract to the next active contract," Tivlon said in a note.
* For the top stories metals and other news, click TOP/MTL or MET/L
($1 = 6.8705 yuan)
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