* Iron ore set for first weekly loss in 2019
* Coking coal slightly lower in volatile trade
* China’s Dalian port bans Australian coal imports
By Enrico Dela Cruz
MANILA, Feb 22 (Reuters) - China’s benchmark iron ore futures dipped as much as 3.2 percent in early trade on Friday and are on track to post their first weekly loss this year, as demand for the steel-making raw material remained weak despite lingering concerns over supply.
Coking coal futures see-sawed after falling on Thursday due to worries about supply in the wake of a mine accident in Queensland and import curbs on Australian coal, which has been banned by customs at China’s northern port of Dalian.
The most-traded iron ore, for May delivery, on the Dalian Commodity Exchange fell to as low as 598.5 yuan ($89.07) a tonne, the lowest in three weeks.
“China’s steel mills appeared reluctant to restock despite the supply outage from Brazil,” ANZ Research said.
Dalian iron ore has risen by 4 percent this month and rallied to record high 657.5 yuan last week amid worries over the loss of some supply following the collapse of top miner Vale SA’s Brumadinho tailings dam in Brazil.
Any restocking by Chinese steel mills is expected to be subdued in the short term considering their pressured margins, tight credit conditions, and sintering cuts as pollution levels continue to worsen, according to Marex Spectron.
It remains unclear if there are producers who could produce and export more iron ore to offset whatever is lost from Brazil’s supply.
“Major producers, including BHP and Fortescue, have indicated they are unable to raise exports significantly to cover the losses from Brazil,” ANZ said.
Dalian coking coal was down 0.4 percent at 1,280 yuan a tonne by 0212 GMT, after gaining 0.4 percent in early trade. Coke edged up 0.7 percent to 2,143 yuan.
The indefinite Dalian ban on coal imports from top supplier Australia, effective since the start of February, comes as major ports elsewhere in China prolong clearing times for Australian coal to at least 40 days.
Steel prices extended gains, with the most-active rebar contract on the Shanghai Futures Exchange up 1.4 percent at 3,725 yuan a tonne. Hot rolled coil ticked higher by 0.6 percent to 3,695 yuan.
$1 = 6.7195 Chinese yuan Reporting by Enrico dela Cruz; Editing by Rashmi Aich