Chinese coke capacity to reach 50 million tonnes
According to Mr Huang Jingan director of China Coke Industry Association In 2007-2008, China's planned coking capacity has reached 50 million tonnes nearly quadrupling last year's actual capacity increment.
With rising coal price and production cost requires by a string of regulatory policies coke price index has advanced to 242.9 from 224.95 posted at the beginning of 2007. In early 2006, this index was as low as 195.According to statistics from the province's department of commerce rebounding price suggests the industry's shift from making loss to profits. In May 2007, the Shanxi Coke Industry Association declared CNY 120 per tonnes price hike, which has generated an effect recently as to export, average coke export price reported USD 169.45 per tonnes in April 2007 up by 30% YoY.
Mr Lu Ping an analyst with China Merchants Securities holds upbeat about this year's coke price prospect based on following reasons first, the coking coal price is on the rise this year; second, last year's slackness has a rejuvenating affect for the current situation; third, boom steel production and sales buoy the coke market up.
Mr Huang gave his explanations why the coke price keeps increasing. In 2006, additional coking capacity registered some 12.5 million tonnes while the demand went up to 30 million tonnes representing favorable equation. During the first quarter of 2007 apparent coke consumption came close to 70 million tonnes, up by 24% YoY plus a number of policies that raise coke production cost, the producers are eager to hike selling price.
From 2006, the coke sector presented signs of picking up yet, the joy is tempered with sorrow, as 35% independently accounted coking mills still suffered loss that year, when the overall sector gained 82% growth in profits. This year, the loss making mills also covered some 30%.
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