October 08, 2008

Chinese coke export price likely to rise further

Chinese government, which announced a major hike in export taxes for low value added steel products recently in a move to rein in the rapid expansion of the industries that consume more energy and discharge more pollutants, may also raise export tariff on coke. As per industry experts, this will further spur coke price hikes owing to anticipation of export tariff advances and bloomy global demand.

MOF did not disclose more details. Market rumor circulates that export tariff on coke will rise by 10% from 15% to 25% yet this has not been confirmed.

As a high polluting, high energy consuming and resource-intensive industry, coke sector in China witnessed cut throat competitions in previous years, leading to slumping price. Exports at prices lower than international average cost have triggered anti dumping investigations as well as domestic resource losses and environmental disruption.

To restrain coke exports, China has removed export rebate, levied export tariff and further raised the tariff to 15% from this June 1st 2007. Statistics show coke exports in June and July 2007 shrank significantly due to increased export tariff. Figures recorded 1.303 million tonnes and 977,000 tons respectively in Jun and Jul, down by 19.1% MoM and 25% MoM respectively.

However, the downtrend soon came to an end. Exports revived since August 2007, boosted by jumping export price. Price stayed below USD 200 per tonne before Aug, but escalated to USD 223.9 per tonne in August 2007, USD 226.7 per tonne in September 2007, USD 229.7 per tonne in October and USD 246.1 per tonne in November 2007. In the meanwhile exports swelled to 1.244 million tonnes, 1.468 million tonnes, 1.42 million tonnes and 1.17 million tonnes respectively.