China, the world’s largest steelmaking nation, may boost coking coal imports after international prices dropped, a research company said.

Domestic coal costs about 1,000 yuan ($146) a metric ton, Xu Zhongbo, chief executive officer of Beijing Metal Consulting Ltd., said today in an interview in Shanghai. Imports of the steelmaking ingredient cost about $120 a ton plus $10 for freight, he said.

Asian coking coal prices plunged almost 60 percent this year from 2008 after the global recession curbed demand from mills including Japan’s Nippon Steel Corp. China is spending 4 trillion yuan to support the economy by building infrastructure, stimulating demand for steel and other metals.

Baosteel Group Corp., the nation’s largest steelmaker, and rivals may have “big increases” in imports of coking coal, Xu said, without giving a specific forecast. Shanxi province, the biggest coal-producing region in the country, has resisted cutting prices on expectation that domestic steel demand will improve, he said while attending a conference.

Transport limitations in the province have also curbed sales to steelmakers in China, he said.

China’s steel prices may extend declines into the third quarter, Xu also said at the conference.

The nation’s benchmark price has dropped 15 percent this year as demand slowed from carmakers and builders. Angang Steel Co., China’s second-largest listed steelmaker, last week said prices will drop further in the second quarter before demand improves from June because of the stimulus.

Prices of flat-steel products, used in autos and appliances, may decline more than that of long products, used in construction, Xu said. That’s because larger steelmakers, who make more of the flat products, are likely to pass on lower iron ore costs, he said.

Chinese steelmakers are in talks with iron ore producers and want to cut prices by between 40 percent and 50 percent this year.

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