Coking enterprises across the country continue to show strong expansion momentum

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The expansion trend of coking enterprises across the country continues unabated. Date: 2009-04-15 Huang Jinqian, president of the China Coking Industry Association, said on April 12 that despite the growing imbalance between supply and demand, coking enterprises nationwide are still expanding their production capacity at a rapid pace. 　　At the \"Bohai Rim Region Steel Futures Investment Conference and Corporate Training Session\" organized by Tianjin Yide Futures Company, he pointed out that China currently has a severe overcapacity in coke production; only by adhering to production cuts and limits in order to control the overall volume can companies reduce their losses. 　　Jin Gang revealed that China’s current coking capacity is between 390 million and 400 million tons, while demand this year will be around 280 million to 290 million tons at most; thus, there is an excess capacity of over 100 million tons. Moreover, the reduction in steel production abroad is much greater than that at home, and China’s coke exports will also continue to decline significantly. In the first two months of this year, total coke exports amounted to only 100,000 tons, a decrease of 93.9% on a year-on-year basis. 　　According to statistics from the China Coking Industry Association, affected by the financial crisis, China’s coke production experienced negative growth for the first time since 1999 in 2008. The total national coke production that year was around 327 million tons, a decrease of about 8.5 million tons compared to the previous year, representing a decline of roughly 2.54%. Although it saw a slight monthly recovery after December last year, gold prices are set to fall again starting from March. 　　On the other hand, the capacity expansion trend among coking enterprises across the country remains strong. Gao Dingan explained that in 2008, the capacity of newly built coking ovens across the country exceeded 30 million tons, and another approximately 7 million tons worth of coking oven capacity had been built or ready for commissioning, but its operation was postponed due to market conditions. ” 　　“Driven by factors such as the acceleration of coke oven infrastructure development by a number of large and medium-sized steel enterprises in the next one to two years, the expansion of coke production capacity by major coal groups, and the continued growth of large and medium-sized independent coking enterprises, it is expected that the capacity of mechanized large and medium-sized coke ovens that are under construction or planned for commissioning will still amount to around 50 million tons. ” Gold Gan said. 　　“Under the current situation of inverted prices for coal and coke, the coking industry is unable to avoid losses. ” Jin Gangan believes that due to the abundant supply of coking coal both domestically and internationally, along with low costs, there is significant room for profit; in fact, domestic prices are even higher than international prices. Therefore, there is still potential for a decline in coking coal prices. 　　The latest report from the China Iron and Steel Association also indicates that as global steel and coke production declines significantly, the demand for coking coal is decreasing as well; it is estimated that the domestic demand for coking coal alone will drop by more than 50 million tons in 2009.