AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


China coke exports said unlikely to reach previous highs

Keywords: Tags  China coke exports, coking coal, export tax, quota


SHANGHAI — Chinese coke exports are not expected to surge to previous high levels despite the removal of a 40-percent tax and quota, industry sources told AMM sister publication Steel First.

The country’s coke exports are expected to reach 3.5 million tonnes in 2013, up from 1 million tonnes last year, according to Huang Jingan, secretary-general of the China Coking Industry Association. But China exported an average of 15 million tonnes of coke per year in the eight years before 2008, when the country first imposed the export tax.

"I don’t think there will be a major impact because Chinese coke doesn’t really compete with international coke, which has a substantially lower cost of production," a Singapore-based trader said, suggesting that without the tax China could export coke at about $280 to $285 per tonne f.o.b., which still isn’t competitive.

"Even if China is able to offer more-competitive coke prices for the international markets, the capacity of the seaborne coke market won’t expand because overseas economies are slowing down," Huang said. "The U.S. complained about China’s tariffs over coke, but it has already seen a balance in supply and demand. The European Union, on the other hand, has seen steelmakers shifting core businesses or selling assets. They have little potential to absorb extra coke supply from China, either."

Chinese exporters should take precautions as anti-dumping complaints could arise in the future if China’s coke exports jump and eat into local supplies, he said.

On the coking coal front, the removal of the 40-percent duty on coke is expected to create a zero-sum game, according to Prakash Sharma, lead analyst for coal at Wood Mackenzie Ltd. "An increase in the export of coke from China removes the need for lower-quality seaborne coking coal for import demand markets in north Asia; but this is counterbalanced by an increase in demand in China for coking coal domestically," he said, estimating that about 11 million tonnes of additional coking coal would be required in China if it ramps up coke exports.

"If domestic mines and/or Mongolia cannot meet this shortfall, which is a possibility given a concurrent announcement implementing protective measures for Chinese domestic coking coal and limits to ramp-up potential for Mongolia, then additional seaborne imports will be required in China," Sharma said.

Effective Jan. 9, certain domestic coking coal mines in China are no longer allowed to produce beyond their designed capacities or adopt outdated mining techniques, part of a broader protective measure for coking coal recently announced by the National Development and Reform Commission.

A version of this article was first published by AMM sister publication Steel First.


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends

Poll

Is severe weather affecting your business?

Yes
No


View previous results