Short term coke prices may maintain high oscillations
Postdate：2023-04-23 Clicks：443
Coke is an important raw material in the modern steel industry, and smelting 1 ton of pig iron consumes approximately 450-500 kilograms of coke. In 1996, Chinas annual crude steel production exceeded 100 million tons, making it the worlds largest steel producer. Since then, crude steel production has remained the top in the world, and the rapid development of the steel industry has also given rise to a huge demand for metallurgical coke. In addition, China has abundant coking coal resources. In 2015, the confirmed resource reserves of coking coal were 280367 billion tons, accounting for 13% of the worlds confirmed coking coal resources. As a rich source of coking coal in the world, Chinas coking industry has natural raw material advantages. China has long been the worlds largest producer of coke, with coke production accounting for about 67% of the worlds total production in 2016.
Chinas coking industry is large and has a significant advantage in raw material costs. In addition to meeting the demand of the domestic steel industry, export trade is also an important flow of domestic coke consumption, laying the foundation for Chinas position as a major exporter of coke. Before 2004, the proportion of Chinas annual coke exports to production was basically 10%, and in 2000, the proportion was close to 16%. However, with domestic demand stabilizing and export policies tightening, the proportion of exports rebounded after reaching the bottom from 2009 to 2012. In 2018, the coke production was 438 million tons, with a total of 9.75 million tons exported, and the proportion of exports was only 2.22%.
Compared to its huge output, Chinas coke export volume accounts for a very low proportion. However, due to the steady promotion of capacity reduction in the steel industry and the rise of electric furnaces in recent years, the demand for metallurgical coke in China has declined, and the problem of coke overcapacity is more prominent. Therefore, exports are of great significance for digesting domestic excess supply. In addition, coke exports also have a strong disturbance effect on spot prices.
Chinas coke export volume fluctuates significantly, mainly due to frequent changes in previous coke export policies. Since 2004, the country has gradually imposed restrictions on coke exports by regulating the qualifications of export enterprises, export quotas, and adjusting tariffs. In May 2004, the 15% export tax rebate for coke was abolished; In November 2006, a 5% export tariff was imposed on coke; Starting from June 1, 2007, the export tariff on coke will be increased to 15%; On January 1, 2008, the export tariff on coke increased to 25%, and on August 20, the export tariff on coke increased to 40%. In 2012, the WTO ruled that Chinas export restrictions on nine types of raw materials did not comply with WTO rules. Starting from January 2013, coke export quotas, export enterprise qualifications, and export tariffs were all cancelled, and only export license management was retained.
