China's coking coal prices, which doubled in 2008, may rise further this year because of higher demand from steelmakers, the nation's largest producer said.

Prices may rise a further 200 yuan ($29) to 300 yuan a metric ton, Liu Jianzhong, deputy general manager of Shanxi Coking Coal Group Co., said at a conference today. Prices will fall from mid-2009 because of rising supplies, he said.

Higher coal prices this year have failed to deter expansion by steelmakers, who are forecast to increase output by as much as 10 percent. Shanxi Coking Co., the publicly traded unit of Shanxi Coking Coal Group, said last week its first-half profit more than doubled.

``In the short term, coking coal supply will remain a little tight, and prices will continue rising,'' Liu said in Beijing. ``For the medium and long term, demand may decline gradually and prices will fluctuate and show a declining trend.''

Demand by steelmakers for rebuilding after the May earthquake in Sichuan province will keep coal prices at a record through to the end of 2009, Hidili Industry International Development Co., southwestern China's largest producer of coking coal, said July 9.

Domestic prices jumped to 1,900 yuan a ton this year, Hao Xiangbin, deputy director of information at China Coal Transport & Distribution Association, said this month.

The apparent demand growth for coke, made from coking coal, will rise about 10 percent a year through to 2010, slower than the 14 percent gain last year as the pace of steel output increase also slows, Shanxi Coking's Liu said.

Apparent demand is calculated from output and net imports and excludes inventories held.

The Chinese government is closing small obsolete steel mills and restricting the building of new plants. China's steelmakers have accounted for 65 percent of the global growth in capacity in the past decade.