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Price of Exported Coke to Rise Further

The export price for metallurgic coke is expected to further increase this year, as a result of reduced export levels and continued demand from the international market, especially from the US, Japan and the EU.

Sources from China Coal and Coke Holdings recently predicted the trend, projecting a price hovering around US$260 per ton for this year.

The country's coke exporting price stood at US$210 to US$230 in the fourth quarter of last year, according to industry sources.

The government has set a quota of 14 million tons for coke exports in 2005, down 1 million tons from 2004.

A total of 48 manufacturing and trade companies have been granted licenses for exporting coke, according to the government.

Last year, 15.01 million tons of metallurgic coke were exported, a year-on-year increase of 1.97 percent, according to customs agencies.

Most of this was shipped from Tianjin in northern China, accounting for 13.2 million tons, or 87.67 percent of the total, and the FOB (Free on Board) price at the port averaged US$261 per ton.

China Coal Industry Association Vice-President Zhu Deren attributed reduced coke exports to soaring demand in the steel industry and the heavy environmental pollution resulting from coke production.

"In the first place, China's coke production should satisfy domestic demand," said Zhu, who is also a member of International Committee for Coal Research.

"Besides, over expansion of coke production is detrimental to China's long term sustainable development, as it causes grave environmental pollution," added Zhu.

National turnover this year is expected to top 215 million tons, a 10 percent growth from the estimated 195 million tons last year, according to industry figures.

The country's coke production in 2004 accounted for nearly half global coke supply, said industry sources.

China's coke consumption is expected to increase to 207 million tons this year, largely due to demand from the steel industry, exports and other industries such as petrochemicals, non-ferrous metals and mechanical manufacturing.

The global iron and steel industry consumed at least 345 million tons of coke in 2004, an increase of 28.2 million tons on 2003, according to figures from the International Iron and Steel Institute.

World steel production - the major consumer of coke - will expand to 1.12 billion tons this year, a rise that will demand no less than 365 million tons of metallurgic coke, according to the institute.

The expected coke demand in 2005 from the international market, as the figures show, presents a year-on-year jump of 20 million tons.

For the first 11 months of 2004, China's coke exports mainly targeted the EU, Japan, Brazil, the US and India, which accounted for 83.1 per cent of aggregate exports, according to customs authorities.

Compared with the same period in 2003, many countries witnessed a declining supply of coke from China, apart from a 72.5 percent increase to the US and a 23.2 percent rise to Japan.

An industry insider named Du from China Coal and Coke Holdings said higher prices encouraged producers to sell their coke to US buyers.

"The export price to the US once stood at US$360 per ton, almost US$100 higher than those to the EU," said Du.

In the light of China's reduced coke exports this year, many of the world's large consumers have begun considering alternatives.

Japan, the US, India and Brazil are strengthening efforts to extend their own production capacities, said Du.

EU nations are looking to two of their newest members - Poland and the Czech Republic - as well as Ukraine for new supplies.

(China Daily February 21, 2005)

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