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
The countrys 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 dont think there will
be a major impact because Chinese coke doesnt 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 isnt
"Even if China is able to offer
more-competitive coke prices for the international markets, the
capacity of the seaborne coke market wont expand because
overseas economies are slowing down," Huang said. "The U.S.
complained about Chinas 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 Chinas 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capacities or adopt outdated mining techniques, part of a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