SINGAPORE - China's imports of coking coal, a steelmaking ingredient, are set to rise further this year after a fatal mine accident reduced domestic supply, traders said.

Chinese importers have turned to producers such as Canada and Australia for delivery in June and July after 155 coal mines in the northern Chinese province of Shanxi, its largest coal producer, were shut for safety checks following the accident in late May. The closures had sent local coking coal prices soaring.

Around 64% of affected production capacity has resumed as of June 17, a survey by consultancy Mysteel showed. However, production remained below the pre-accident level, Johnny Deng, vice manager of ferrous metals at trading firm Gent Commodity, told the Singapore coking coal conference on Thursday.

He expects the utilisation rate to average at 70% to 80%, down from 105% to 110% earlier.

"We bought a few Canadian cargoes and imported them into China after prices shot up following the accident," said Deng.

Coking coal futures prices touched a 19-month high of 1 486.5 yuan a ton on June 8, but have slipped 5% this week.

The initial probe has uncovered further safety issues at the mines, with the government vowing to leave no stone unturned, State media reported last month.

Edwin Yeo, a senior manager at trading firm Exen Resources, expects a shortage of 20-million to 30-million tons even after the plants restart.

"That's particularly for the higher-grade cargoes, which you cannot get from Russia and Mongolia," he told the conference.

China's imports of coking coal in the first four months have already risen 20% from a low base a year ago due to higher supply from major producers such as Mongolia and improved border logistics, despite a 4.1% slide in steel output.

The rise in Chinese imports has also spurred concerns of stiffer competition for global supplies.

"China will eat up much coking coal from overseas," said Junxing Zhang, a manager at PT Kinrui New Energy Technologies Indonesia, a metallurgical coke producer.

"We cannot compete with them to buy coals, which are popular in China," Zhang said, adding that the company procures material from other regions with lower Chinese demand, including Colombia and the US, to keep costs competitive.

However, some traders and steelmakers are cautious about importing more coking coal into China amid compressed steel margins and uncertain steel demand.

"It's hard to predict what prices will be like in two to three months...so we have not decided to buy more seaborne cargoes," said a manager from a Chinese steelmaker on the conference sidelines, who declined to be named as they were not authorised to speak to the media.

Also, the price gap between domestic coking coal and imports has narrowed, reducing the incentive to increase shipments, the trader said.