In-depth article ‖ On the physical and chemical properties, distribution, applications, and current state of the coke industry!

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Introduction: As an important industrial raw material, the demand for coke is closely linked to the economic situation. It was mainly used in blast furnace ironmaking as well as in the smelting of non-ferrous metals such as copper, lead, zinc, titanium, antimony, and mercury. It laid the foundation for the enlargement of modern blast furnaces and represents a major milestone in the history of metallurgy. Many friends have asked Petrochemical Yuan for information on this topic, so today I’ve compiled a document for everyone’s reference! Overview of coke: Bituminous coal is heated to 950–1050°C in an oxygen-free environment, and through stages such as drying, pyrolysis, melting, bonding, curing, and shrinkage, it is ultimately transformed into coke. This process is known as high-temperature coking (high-temperature dry distillation). Coke produced by high-temperature coking is used in blast furnace smelting, casting, and gasification. Coke oven gas, which is recovered and purified during the coking process, serves as both a fuel with high calorific value and an important raw material for the organic synthesis industry. I. Distribution and Uses Looking at the distribution of coke production in China, it can be seen that coking enterprises are unevenly distributed across the country, with the majority located in North China, East China, and Northeast China. Coke is mainly used in blast furnace ironmaking, as well as in the smelting of non-ferrous metals such as copper, lead, zinc, titanium, antimony, and mercury; it serves as a reducing agent, a heat source, and a structural component for the charge pile. The use of coke instead of charcoal in ironmaking blast furnaces laid the foundation for the enlargement of modern blast furnaces, marking a significant milestone in the history of metallurgy. To achieve favorable technical and economic parameters in blast furnace operation, coking coal used for smelting (metallurgical coke) must possess appropriate chemical and physical properties, including its properties under hot conditions during the smelting process. In addition to being widely used in iron smelting and the processing of non-ferrous metals (as metallurgical coke), coke is also used in foundry industry, the chemical industry, calcium carbide production, and ferroalloys, with varying quality requirements for each application. For casting coke, it is generally required to have a large particle size, low porosity, high fixed carbon content, and low sulfur content ； Coke used for chemical gasification does not require high strength, but it needs to have good reactivity and a high ash melting point ； The coke used in calcium carbide production is required to have as high a fixed carbon content as possible. II. Physical Properties The physical properties of coke include the sieve analysis composition of coke, the bulk density of coke, the true relative density of coke, the apparent relative density of coke, the porosity of coke, the specific heat capacity of coke, the thermal conductivity of coke, the thermal stress of coke, the ignition temperature of coke, the coefficient of thermal expansion of coke, the shrinkage rate of coke, the electrical resistivity of coke, and the air permeability of coke, among others. The physical properties of coke are closely related to its mechanical strength and thermal strength at room temperature, as well as its chemical properties. The main physical properties of coke are as follows: the average specific heat capacity is 0.808 kj/(kg·K) at 100°C, and 1.465 kj/(kg·K) at 1000°C ； The thermal conductivity is 2.64 kj/(mh·K) at room temperature, and 6.91 kj/(mh·K) at 900°C ； The ignition temperature (in air) is 450-650℃ ； The low calorific value of the dry, ash-free base is 30-32 KJ/g ； III. Chemical Composition: The reactivity of coke and its ability to undergo chemical reactions with carbon dioxide, oxygen, water vapor, etc. CRI = (G0 – G1) / G0 × 100% (Note: G0 ---- weight of the test coke sample, in grams ； G1----Weight of the coke sample after reaction, g ； ). The strength of coke after reaction refers to its ability to resist fragmentation and wear under mechanical and thermal stresses after the reaction. In blast furnace ironmaking, foundry ironmaking, and fixed-bed gasification, coke undergoes chemical reactions with carbon dioxide, oxygen, and water vapor. Since the reaction of coke with oxygen and water vapor follows patterns similar to those of its reaction with carbon dioxide, most cases **use the reaction properties of coke with carbon dioxide to assess its reactivity. The repeatability r of coke reactivity CRI and post-reaction strength CSR shall not exceed the following values: CRIr ≤ 2.4% ； CSR: ≤3.2% ； The test results for coke reactivity and strength after reaction are both the arithmetic averages of the results from duplicate tests. IV. Price Factors The fundamental factor driving fluctuations in coke prices is the market supply and demand relationship; other factors influence prices by affecting this supply and demand relationship. In price analysis, the most important aspect is studying the relationship between supply and demand. The supply-demand relationship refers to the interconnection and mutual restraint between the supply and demand of goods under market economy conditions; it is a reflection in the market of the relationship between production and consumption. When supply exceeds demand, its price falls; conversely, it rises. At the same time, price in turn affects supply and demand; that is, when prices rise, supply increases while demand decreases, and vice versa, with demand rising and supply decreasing. Therefore, price and supply and demand influence each other. Overall, the supply and demand balance is characterized by a tight supply situation. The main factor contributing to the tight supply of coke in the domestic market is no longer rising demand, but rather insufficient supply resulting from inadequate transportation capacity and ongoing shortages of resources. It should also be noted that while developed countries see a decrease in demand for coke due to economic crises, the rapid economic growth in developing countries will compensate for this decline in demand from developed countries. Inventory status: Inventory status is an important indicator for analyzing supply and demand relationships. Producers, traders, and consumers adjust their inventory levels primarily based on changes in coke prices and their own inventory capacity. Inventory is an important indicator for analyzing coke price trends. For example, Tianjin Port, which accounts for 75% of the country’s coke exports, has become a barometer for the prices of coke exported from China. Inventory is divided into reported inventory and unreported inventory. Reported inventory, also known as “explicit inventory,” refers to the inventory held by the exchange. Non-reported inventory, also known as “hidden inventory,” refers to the inventory held by producers, traders, and consumers worldwide. Since these inventories are not regularly made public, it is difficult to keep track of them; therefore, exchange inventories are generally used as a measure. Import and export situation: To analyze the supply and demand dynamics of coke, it is necessary to pay attention to China’s import and export figures for coke. Since coke export prices are basically linked to domestic prices, the quota volume also plays a crucial role. **Policy **The impact of policy on prices is obvious. As efforts to reduce energy consumption and emissions progress, **many small coal mines have been shut down, and the coal supply will remain tight; as a result, coal prices will continue to rise. The increase in coal prices will inevitably lead to an increase in coke prices as well. **Import and export policies, particularly tariff policies, are important tools for balancing domestic supply and demand by adjusting the costs of importing and exporting goods, thereby controlling the volume of imports and exports of a particular commodity. Additionally, Shanxi Province’s large-scale integration of the coal industry and **adjustments to export tariff rates are all factors driving up coke prices. The accelerated phasing out of outdated coking capacity in various provinces will also lead to tighter supply. Industrial development: Consumption is a direct factor affecting coke prices, while the development of the coke industry is an important factor influencing consumption. Among them, production cost is the basis for measuring the price level of goods. Industry conditions: Paying attention to price changes in upstream and downstream products, as well as the trends in prices of other energy and resource-related products, is helpful for analyzing coke prices. Examples include shortages of primary coking coal and coal blends for coking at the upstream level, fluctuations in international oil prices, and the release of production capacity in the steel industry. Macroeconomics: Coke is an important industrial raw material, and its demand is closely linked to the economic situation. When the economy grows, demand for coke increases, which drives up its price; during an economic recession, demand for coke declines, causing its price to fall. When analyzing the macroeconomy, two indicators are very important: one is the economic growth rate, or GDP growth rate, and the other is the added value of industrial production. The macroeconomic cycles, economic conditions, trends in economic development, exchange rate fluctuations, etc., are also background information that is necessary to understand regarding changes in coke prices. Fluctuations in market psychology: The psychological factors of investors also influence price changes for coking coal in the trading market. Psychological factors play a role in driving prices up or down. When investor confidence collapses, it often leads to a faster decline in the market; when investor confidence is high, it tends to drive the market even more wildly. V. Current Situation of the Industry: Overview – The coke market is relatively sluggish, with low demand and slight price adjustments. Both domestic and international markets show weak demand, and it is expected that the coke market will maintain a pattern of steady adjustment in the short term. The current coke market is well-supplied; steel mills have little enthusiasm for making purchases, and they remain pessimistic about the steel market in the future. Meanwhile, coking coal prices remain at high levels. In Shanxi, the price of high-quality primary coking coal is around 1,200 yuan per ton. Nationwide, coking plants have been forced to significantly cut production; some have even ceased operations entirely. The extent of production cuts exceeds 50% in many cases, while some small coking plants merely maintain the temperature of their coke ovens. China’s coke exports have declined sharply since October 2008. In September 2008, China exported 1.373 million tons of coke; thereafter, export volumes declined sharply month by month, with only 21,000 tons exported in May 2009, the lowest level since January 2008. In September 2009, China exported 40,000 tons of coke, a decrease of 97.08% on a year-on-year basis ； From January to September, total exports amounted to 360,000 tons, a year-on-year decrease of 96.7%. Affected by the international financial crisis, the global economic growth rate has slowed down significantly, and demand for steel has declined markedly. The European Iron and Steel Federation predicts that steel consumption in Europe will fall by 33% in 2009 compared to 2008, and demand for coke, an important raw material in steel production, is also declining gradually. Major coke importers such as the United States, Europe, and Japan have gradually withdrawn from the international coke market. Meanwhile, countries like Brazil and India, with the improvement of their domestic coke production capabilities, tend to import coking coal to produce their own coke, thus showing a trend of reducing their reliance on Chinese coke. Furthermore, in order to meet domestic demand for coke resources and implement **energy conservation and emission reduction plans, China has introduced various policies to restrict coke exports, resulting in a significant lack of enthusiasm among enterprises to export. In 2009, a coke quota of 11.91 million tons was allocated in two batches, which was roughly on par with the 12.01 million tons of export quota in 2008. With the current low demand for imports from abroad, coke quotas appear to be excessive. Currently, the domestic coke market is experiencing steady, minor adjustments; there is an ample supply of coke in this market, yet demand is weak both in the international and domestic markets. In recent months, China’s coke exports have remained at low levels. On the one hand, the international financial crisis has led to a significant decline in global demand for coke; on the other hand, due to restrictions on coke exports, domestic companies’ export of coke has also decreased markedly. Based on an analysis of the domestic and international market conditions, market demand is expected to remain at low levels, with steady and slight fluctuations likely to persist. Market trends: China’s coke production has gone through a process of rapid growth, followed by overcapacity, and finally stabilization and recovery. In 2010, China’s coke output reached 388 million tons, a year-on-year increase of 9.10%. The share of China’s output in the world total rose from 20% in 1990 to 61.60% in 2010, making China the world’s largest coke producer. Similar to coke production, China’s apparent consumption of coke also went through a period of rapid growth followed by a recovery. In 2010, coke consumption was 365 million tons, representing a year-on-year increase of 7.56%. At the same time, coke exports also increased in 2010, rising by 513.50% to reach 3.55 million tons. At present, our country has become the world’s largest producer, consumer, and exporter of coke. On June 3, the domestic coke market remained stable in most areas, with slight declines observed in a few regions, though the extent of those declines was gradually decreasing. Affected by the overall decline in various commodity markets and the persistent weak demand from downstream steel mills, coke producers have generally reduced the ex-plant price of coke by 10–30 yuan per ton. This has led to a drop in coke prices in some areas, but most producers say that current coke prices are already low and they are operating at a loss, so they are not inclined to further reduce prices. According to coking plant operators in areas where prices have dropped, there has been no significant improvement in the sales performance of these plants after the price cuts; demand from downstream steel mills remains low, which has led to a slight increase in the inventory levels of these coking plants. In summary, it is expected that the domestic coke market will show a downward trend in the short term, but the decline will not be significant. Currently, the price of second-grade metallurgical coke in the Handan area of Hebei is 1,270 yuan, while the tax-inclusive price for quasi-first-grade coke at the factory is 1,310 yuan, representing a decrease of 30–50 yuan compared to yesterday ； Tangshan second-grade metallurgical coke costs 1,360 yuan, while first-grade equivalent coke costs 1,430 yuan. The price of grade II metallurgical coke in Shanxi region is currently 1,140–1,160 yuan. The taxable ex-plant price for mainstream secondary metallurgical coke in the East China region is 1290–1310 yuan. The ex-warehouse price, including taxes, for grade 1 metallurgical coke in Fushun, Liaoning Province, in the Northeast region is 1,570 yuan ； The ex-warehouse price, including taxes, for secondary metallurgical coke in the Qitaihe area of Heilongjiang is 1,430 yuan. The ex-warehouse price, including taxes, for secondary metallurgical coke in the Anyang area of Henan is 1340 yuan ； The ex-plant price, including taxes, for secondary metallurgical coke in the Luoyang area is 1,550 yuan, remaining unchanged from yesterday. Current export situation: Due to the global financial crisis, coal prices have dropped significantly. Although domestic coal prices have also fallen, they remain higher than those in the international coal market, which will lead to further changes in the supply and demand dynamics in China’s coal market. According to statistics, China exported 12.127 million tons of coke in 2008, a 20.7% decrease compared to 2007 ； Total export value: $5.81 billion, an increase of 90.1% ； The average export price was $478.9 per ton, up by a factor of 1.4. China’s coal exports declined continuously starting in June 2009; from January to August, the country exported 33.64 million tons of coal, a 0.3% increase on a year-on-year basis. In August, 3.37 million tons of coal were exported, 1.41 million tons less than in July. Coke exports remained virtually stagnant in 2009. Since the fourth quarter of 2008, affected by the global financial crisis, steel demand in developed countries and regions such as Europe, the United States, and Japan declined sharply, with the scale of steel production cuts there far exceeding that in China. According to statistics from the International Iron and Steel Association, global crude steel production has been declining continuously since the first half of this year. From January to June, while China’s crude steel production increased by 1.23% on a year-on-year basis, global crude steel production declined by 21.3%; excluding China, other regions saw a 35% drop in production. Among them, the United States reduced production by 51.8%, the European Union (27 countries) by 43.2%, Japan by 40.7%, and the CIS by 32.3% (with Russia reducing production by 30.2%). In these **regions, steel production has declined significantly; the supply of domestic coke has exceeded demand, or exports have increased, resulting in a sharp reduction in demand for coke from China. At the same time, due to China’s imposition of a high export tariff of 40% on coke, strict controls on coke exports, and the fact that domestic prices for coking coal are currently higher than international market prices, China’s coke exports have declined significantly or essentially come to a standstill since 2009. In the first half of the year, the total volume of coke exported was only 230,000 tons, a decrease of 7.21 million tons compared to the previous year (accounting for about 90% of the overall reduction in coke production across the country), representing a decline of 96.9%. In April and May alone, the monthly export volume of coke was around 20,000 tons. Exports from January to May 2014: In May, China’s exports of coke and semi-coke amounted to 1 million tons. In the first five months of this year, the total exports of coke and semi-coke across the country were 3.41 million tons, with a value of $767 million, representing increases of 2.5 times and 199.3% respectively on a year-on-year basis. Regarding the significant increase in coke exports, officials from Taiyuan Customs suggest that **the elimination of tariffs and quota restrictions on coke exports has reduced export costs, thereby greatly enhancing China’s competitiveness in the international market for coke. Since the export tariff on coke was raised to 40% in 2008, coke exports have declined significantly. Since 2013, China has officially abolished the 40% export tariff and quota system on coke, replacing it with an export licensing system; as a result, coke exports have seen a significant increase, reaching 4.67 million tons in 2013, a 358% rise compared to 2012. The abolition of export tariffs on coke in 2013 was in line with the development trends of the industry and the market: on the one hand, advances in compacting coking technology have enabled a larger proportion of non-coking coals – around 50% to 70% – to be mixed with coking coal for use in coking processes, thereby expanding the range of available coking coals and allowing existing reserves of such coals to be utilized for a longer period; on the other hand, restrictions on coke exports prompted countries in Europe and the United States to file complaints, resulting in domestic overcapacity losing access to international markets. Recent moderate exports of coke have little impact on meeting domestic market demand, but they are significant for maintaining economic growth and easing international trade disputes, while also providing time and funds for economic transformation and development. Exports from January to September 2015: Data released by the General Administration of Customs on October 13, 2015, showed that cumulative coke exports from January to September 2015 amounted to 6.79 million tons, representing a 18.5% increase compared to the previous year ； In September 2015, China’s coke exports amounted to 670,000 tons, with an average export price of 853.9 yuan per ton, representing a 11.8% decline on a month-on-month basis. Production: Since the 1980s, with the rapid economic development of China, its coking industry has also entered a period of fast growth. In 1991, China’s coke production rose to become the highest in the world. By 1994, its annual coke output exceeded 100 million tons. In 2000, China’s exports of coke accounted for 60% of the world’s total coke trade, making it the largest producer of coke in the world. In 2008, China’s total coke production was approximately 327 million tons, while from January to September 2009, the production volume was 252.7687 million tons. VI. Quality evaluation: It is a solid product of high-temperature retorting; its main component is carbon, and it consists of structures with cracks and irregular pore formations (or poreous frameworks). The number of cracks directly affects the strength and crush resistance of coke, with this property generally being measured by the crack density (referring to the length of cracks per unit volume of coke). The indicator for measuring the pore structure is primarily the porosity (the percentage of the pore volume in coke relative to its total volume), which affects the reactivity and strength of the coke. Coke for different applications has varying requirements regarding porosity; generally, metallurgical coke requires a porosity of 40–45%, casting coke requires 35–40%, while coke intended for export needs a porosity of around 30%. The degree of cracking and porosity in coke are directly related to the type of coal used in coking; for example, coke produced from bituminous coal tends to have many cracks, a high porosity, and low strength ； Coke produced from coking coal as the base coal has fewer cracks, a lower porosity, and higher strength. Coke strength is usually expressed by two indicators: crush resistance and wear resistance. The crush resistance of coke refers to its ability to resist external impacts without breaking along the cracks or defects in its structure, and it is expressed by the M40 value ； The wear resistance of coke refers to its ability to resist external friction forces without the formation of surface glass, debris, or powder, and it is expressed by the M10 value. The crackness of coke affects its crush resistance value M40, while the pore structure of coke influences its wear resistance value M10. There are many methods for determining the M40 and M10 values; in China, the German Migon drum test is commonly used. Quality indicators 01: Sulfur content in coke: Sulfur is one of the harmful impurities in the smelting of pig iron; it reduces the quality of pig iron. In steel-making pig iron, a sulfur content of more than 0.07% renders it scrap. 11% of the sulfur brought into the furnace from the blast furnace charge comes from the ore ； 3.5% comes from limestone ； 82.5% comes from coke, so coke is the main source of sulfur in the furnace charge. The sulfur content in coke has a direct impact on blast furnace iron production. When the sulfur content in coke is greater than 1.6%, for every 0.1% increase in sulfur content, the amount of coke required increases by 1.8%, the amount of limestone added increases by 3.7%, the amount of ore added increases by 0.3%, and the blast furnace’s production decreases by 1.5–2.0%. The specified sulfur content limit for metallurgical coke is no more than 1%; the sulfur content in metallurgical coke used in large and medium-sized blast furnaces is less than 0.4–0.7%. 02、Phosphorus content in coke: The phosphorus content in metallurgical coke used for iron production should be below 0.02 — 0.03%. 03、Ash content in coke: The ash content in coke has a significant impact on blast furnace smelting. An increase of 1% in coke ash content results in an increase of 2–2.5% in the amount of coke required. Therefore, it is very necessary to reduce coke ash content. 04. Volatiles in coke: The maturity of coke can be determined based on its volatile content. If the volatiles content is greater than 1.5%, it indicates green coke ； A volatile matter content of less than 0.5–0.7% indicates over-oxidation; typically, the volatile matter content in mature metallurgical coke is around 1%. 05. Moisture in coke: Fluctuations in moisture can lead to inaccurate measurement of coke, thereby causing fluctuations in furnace operation. Furthermore, an increase in coke moisture causes M40 to be on the high side and M10 to be on the low side, leading to errors in the drum test results. 06、Sieve composition of coke: The particle size of coke is also very important in blast furnace smelting. In the past, China required that for large coke ovens (1300 – 2000 square meters), the particle size of coke should be greater than 40 millimeters ； The coke particle size in medium and small blast furnaces is greater than 25 millimeters. However, tests conducted by some steel mills show that a coke particle size of 40–25 millimeters is optimal. Coke larger than 80 millimeters should be in whole particles to maintain a relatively constant particle size range. In this way, the coke has uniform size, large pores, low resistance, and the furnace operates well. Primary indicator: Metallurgical coke refers to blast furnace coke, foundry coke, ferroalloy coke, and coke used in non-ferrous metal smelting. Since over 90% of metallurgical coke is used in blast furnace ironmaking, blast furnace coke is often referred to as metallurgical coke. The quality standard for metallurgical coke established in China (GB/T1996-94) is the blast furnace quality standard. Industrial indicators: Note that, first, the cast coke listed in the table is divided into three categories based on its size: greater than 80 mm, 80–60 mm, and greater than 60 mm (combined coke; the strength parameters are based on those of particles larger than 80 mm). Secondly, as specified in the table, the particle size (mm), ash content (%), and strength (%) are all quality assessment indicators; if any of these indicators fails to meet the specified requirements, the material cannot be accepted at that grade (in the case of the strength indicator). VII. Detailed uses: Fixed carbon: over 83 ； Sulfur below 0.5 ； Volatile matter below 1.5 ； Ash content around 15 ； Mechanical coke: (for metallurgy ； Trial use in steel mills) ； Adjusting the coke particle size to 8cm–150cm: (ferrous slag ； Used for casting motor housings, radiators, and mechanical counterweights) ； Fatty coal coke: (molten iron ； Used for casting motor housings, radiators, and mechanical counterweights) ； Large pieces of modified coke: (used for ordinary casting ； Rough components such as mechanical parts are suitable for furnace models of 2–3.5 tons ； Fixed focal length particle size of 25 cm: (used for ordinary casting and slightly more demanding casting applications) ； such as water pump fittings and fire-fighting fasteners, etc.) ； Fixed carbon of 85 or above ； Volatile matter 1.5. ； Ash 13.5 ； Sulfur content below 0.5, with coke particle size of over 8 cm: (used for ordinary casting) ； Fixed focal grain size: 25 cm; {used for precision casting and ductile iron casting} ； Improved coking coal: (produced from primary coking coal) (suitable for precision casting and ductile iron casting), with a fixed carbon content of over 86% ； Sulfur below 0.5 ； Ash content 12 or less ； Volatile matter below 1.5; coke particle size of 4 cm–8 cm or over 10 cm: (for ordinary casting) ； Fixed focal particle size of 25 cm: (used for precision casting and ductile iron casting; suitable for furnaces of 3 tons or more) fixed carbon content of 88% or higher ； Sulfur below 0.5 ； Ash content below 10 ； Casting coke with a volatile matter content of 1.5 or less ； Fixed focal grain size of 25 cm: (suitable for all high-grade precision ductile iron casting applications and international export standards) ； Kneading coke of 8 cm or more: (used for ordinary casting and high-demand casting products ； such as water pump fittings and fire-fighting fasteners, etc.) ； High-sulfur coke with fixed carbon of 788,385 or above: (used for copper production, aluminum production, plastic manufacturing, and as coke in the chemical industry) ； Bituminous coal coke with a fixed carbon content of over 83: (used for the extraction of carbon monoxide in gas production; rich in gas) ； Fixed carbon around 78; coal powder coke: (annealing of cast components, industrial coke, chemical coke, copper production, aluminum production, plastics) ； Coke with a fixed carbon content of around 65: slurry coke – (used for civilian applications, annealing of casting components, and in the chemical industry). VIII. Industry Trends: Coking coal prices: Coking coal prices are on the rise. The contract prices for international coking coal were largely determined in the first quarter of 2011. According to media reports, the steel mills have agreed to accept BHP Billiton’s request to raise the contract price for coking coal for the first quarter of 2011 by 8%; as a result, international coking coal prices will return to their peak level of $225 per ton recorded in the third quarter of 2010 over the next three months. This increase rate is roughly similar to the 7.6% rise in iron ore prices in the first quarter of 2011. Over the past 6 months, as the growth rate of China’s crude steel production slowed down significantly, Asia’s share of global crude steel production continued to decline. Supported by rising steel demand in regions such as Europe and the United States, international coking coal prices remained at relatively high levels (USD 209 per ton in the fourth quarter). In October 2010, although the share of crude steel production in Asia dropped to 61.66%, global steel production began to show a significant recovery, indicating that demand for coking coal in other regions remained strong. As the operating rate of China’s steel industry rebounds, domestic coking coal prices are expected to rise significantly in line with international market trends. The process of reducing inventory in China’s steel industry has essentially come to an end. With the gradual removal of production restrictions, the steel industry in China has continued to resume operations since December, and according to our monitoring reports on this industry, the operational rate has reached 85%. On an annual basis, given that fixed-asset investment is expected to grow by 23% in 2011, a 7% increase in crude steel production for that year can be considered certain. In the short term, the rebound in domestic steel production growth and rising international coking coal prices are expected to drive a significant increase in domestic coking coal prices. Since October 2010, coke prices across various regions have shown a significant upward trend, but they are still 56%-70% below the peak levels reached in 2008. The rise in coke prices can have a significant positive impact on the short-term performance of companies that are involved in the coke industry ； With the introduction of coke futures, listed companies can use hedging strategies to avoid large fluctuations in coke prices, and the valuation of this sector is expected to increase. Futures situation: Coking coal futures were officially launched in March 2011, which helps to gain control over international pricing power. China’s coking coal products hold an important position in the international market; the country is now the world’s largest exporter of coking coal, exporting around 14 million tons per year, accounting for nearly 60% of global coking coal trade. In Shanxi Province alone, the share in the international coking coal trade exceeds 50%. Tianjin Port is the largest coke export port in China, and its prices have become a benchmark for the international coke market. Following the global financial crisis, due to declining foreign demand and China’s strategic protection of its coke resources through the imposition of tariffs as high as 40% as well as an export quota system, coke exports dropped by over 95% on a year-on-year basis in 2009. After entering 2010, exports began to recover; in the first half of the year, Shanxi Province exported 708,000 tons of coke, a figure that represented a 6.2-fold increase compared to the previous year. This amount accounted for 50.6% of China’s total coke exports, which amounted to 1.4 million tons. This shows that Chinese coke still holds a significant share in the international market, and the introduction of coke futures can further help China gain control over the international pricing of coke. It helps to protect the interests of the industry: Liu Tailai, deputy secretary-general of the Shanxi Coking Industry Association, believes that with the advent of China’s era of heavy chemical industry, there is an increasing demand for steel across society, which in turn drives a strong demand for coke. For the coking industry, which is already accustomed to a simple profit model of purchasing coking coal, converting it into coke, and then selling it to steel mills, coke futures trading not only helps to promote structural adjustments within this industry but also enhances its capacity for industrial development and risk mitigation. Moreover, the introduction of coke futures allows for the establishment of a pricing center; using futures for hedging can also help companies avoid risks associated with price fluctuations and safeguard the interests of the industry. It helps enterprises avoid risks: Chinese steel companies have a coking coal self-sufficiency rate of only around 30%, meaning that about 70% of their coking coal needs must be met through market channels. China’s coking industry operates downstream of the coal industry and upstream of the steel industry; it faces pressure from both high coal costs upstream and low steel prices downstream, resulting in narrow profit margins. In 2010, affected by the volatile prices in the steel market, coke prices also fluctuated. Coke prices have fluctuated from 1,900 yuan per ton in late January to the current range of 1,700–1,800 yuan per ton. However, the price of coking coal remains high. The price of grade 9 coking coal in the Linfen area of Shanxi is over 1,630 yuan. In the early stage, the downstream steel industry was affected by energy conservation and emission reduction measures, leading to a decline in demand for coke; as a result, coke prices were highly influenced by steel prices. In 2011, coking companies even sold coke to steel mills at prices 100 yuan below the cost price, resulting in severe losses for the coking industry. Domestic coking enterprises have generally adopted production restriction measures; most coking plants in regions such as Hebei and Shanxi are operating at reduced capacity, with the reduction ranging from 30% to 50%. Chinese coking enterprises face significant operational risks and urgently need to find ways to effectively avoid these risks as well as market-based mechanisms for operation. The introduction of coke futures is beneficial to domestic coke producers as well as to the healthy and stable operation of the domestic coking industry. IX. Distribution Areas: Qinhuangdao. Qinhuangdao Port is the world’s largest coal export port and bulk cargo port, equipped with the most advanced coal handling equipment, processes, and supporting facilities in the world. It boasts the world’s largest dedicated coal storage area in ports, with a maximum storage capacity of 10.425 million tons. As the world’s largest coal export port and the key hub of China’s strategy to transport coal from the north to the south, Qinhuangdao Port Co., Ltd. accounts for nearly 50% of the total amount of coal exported through China’s coastal ports each year. Tianjin Port is the largest international trade port in northern China and the seaport gateway to the capital, Beijing. It currently has 7 dedicated coal berths, with a coal handling capacity of 33 million tons per year. There are a total of 7 tracks in the port used for unloading coal trains, with an annual coal unloading capacity of 10 million tons. The effective usable area of the coal storage yards under the port authority is 980,000 square meters, while the total capacity of all coal storage yards under the port authority for single-time storage is 1.8 million tons. Rizhao Port is located in the middle of China’s coastline. Its direct economic sphere includes areas such as southern Shandong, northern Henan, southern Hebei, southern Shanxi, and Guanzhong in Shaanxi. Rizhao Port boasts two 150,000-ton coal-specific berths in China with the deepest draft and the largest berthing capacity, as well as one 50,000-ton coal-specific berth. It has 10 coal-specific storage yards with a storage capacity of 3.5 million tons, enabling an annual handling capacity of 45 million tons. Guangzhou Port is located at the mouth of the Pearl River and in the heart of the Pearl River Delta, the region with the most active export-oriented economy in China. Guangdong Province is a major energy consumer in South China, with an annual coal consumption of over 80 million tons; water transport accounts for 70% of the coal used for power generation in the entire province. Guangzhou Port is the largest energy transshipment port in South China, and it has established a coal trading center. Qingdao Port: Qingdao Port is the first international container transshipment port in mainland China. Qingdao Port currently has 2 dedicated berths for coal, capable of handling coal ships ranging in size from 5,000 tons to 100,000 tons, with an annual handling capacity of over 15 million tons. It features world-class modern coal-specific docks as well as a complete set of advanced automated dump-loading systems, with a dumping efficiency of 120 7,600-ton vessels per hour and a loading efficiency of 9,000 tons per hour. Lianyungang: Lianyungang Port is located on the southwest shore of Haizhou Bay, in the central part of China’s coastline. It serves as the terminal port for the Longhai and Lanzhou-Xinjiang railways, which are major transportation routes running across China from east to west. The dedicated coal terminal in Lianyungang has a loading capacity of 12 million tons, while its unloading capacity and single-line loading capacity are both 3,000 tons per hour. Jingtang Port: The Jingtang Port area is an important port for the transportation of key goods; it plays a significant role in the transport of coal, ore, steel, and other commodities in China. It is one of the seven ports used for transporting coal from the north to the south. In 2009, the port’s cargo handling volume reached 105.41 million tons, a 38% increase on a year-on-year basis, ranking first among all coastal ports in the country in terms of growth rate. This article is compiled and published based on information from Baidu Baike, Baidu Wenku, and Shihua Yuan. If there are any inaccuracies, please feel free to leave a message to correct them; please indicate Shihua Yuan when reproducing this content!