December 04, 2008

Chinese coke export surge despite hike in export taxes

It is reported China has witnessed surge in coke export volumes and prices despite as the added export cost brought by export tariff hike is passed on to foreign buyers thus questioning the effectiveness of new restrictive export policies.

Statistics from customs show that China exported 11.731 million tonnes of coke during the first three quarters valued at USD2.15 billion up by 9.6% and 48% respectively from last year. Export price averaged USD183.2 per tonne up by 35% over that in 2006.

China raised export tariff on coke to 15% from June 1st 2007, after a 5% export tariff imposition since last November 1st 2007. Due to the new policy, export volume in June and July shrank notably yet revived during August and September owing to surging export price.

Export volume recorded 1.303 million and 977,000 respectively in June and July down by 19.1% and 25% respectively MoM export price stayed below USD200 per tonne. But the price then escalated to USD 223.9 per tonne in August and USD226.7 per tonne in September. In the meanwhile monthly export volume swelled by 27.3% and 18% respectively MoM to 1.244 million tonnes and 1.468 million tonnes.

Insiders point out there are now 1400 coke producers in China with capacity of 300 million tonnes but medium and small producers account for over 80%. Large amounts of producers yet small production scale go against environment protection and the enhancement of resource utilization rate.

China should tighten macro control on coke industry, implement industry admittance, optimize industrial organization and distribution and curb coke capacity, in a bid to maintain normal order in coke export market.