Documents from the Coking Industry Association of Shanxi Province

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Document from the Coking Industry Association of Shanxi Province, Document No. Jin Jiao Xie Mi Zi (2009)30: Guidelines regarding the coke market in August 2009. To all member companies as well as enterprises involved in coking production and distribution: Since July, significant changes have taken place in the steel market, with steel prices continuing to rise； The supply of coking coal is not only tight, but coal prices have also risen by 100–200 yuan per ton on average ； With such changes, the production and operations of coking enterprises, especially those in Shanxi, will face even more severe losses. Based on the current trends in the coke and steel markets, the association has, after careful consideration, formulated guidance guidelines for the coke market for August 2009. 　　I. Produce based on sales to ensure stable supply 　　Given the high prices of coking coal and the ongoing losses faced by coking enterprises, in order to prevent further uncontrolled price increases for coal and avoid increased losses in the coking industry, the association urges these enterprises to adhere to the principle of producing based on sales. It recommends that production be limited by 30% in order to stabilize market supply, reduce inventory levels, and lessen losses. 　　II. Strengthening quality management 　　Affected by the current shortage of coal sources and various types of coal, as well as the increasingly fierce market competition, the association urges enterprises to strengthen quality management and to arrange production in strict accordance with the requirements stipulated in contracts. 　　III. Regarding coke prices In light of the recent sharp rise in the prices of coking coal and the ongoing shortage of such coal, and in order to reduce losses for coke manufacturing enterprises, protect their legitimate rights and interests, maintain their normal production and operations, and better support the development of the steel industry, taking into account the current trends in the coal and steel markets, the association has put forward guidelines regarding the quality and prices of coke for August: the quality standard is coke with a sulfur content of ≤0.7% and an ash content of ≤12.5%, while the price is based on the ex-warehouse price including taxes, at 1,880 yuan per ton, effective starting from August. In the event of significant changes in the coal and steel markets, the association will make adjustments as appropriate depending on the circumstances. 　　Companies are requested to communicate with their respective customers in accordance with these guidelines and arrange production and marketing activities. August 5, 2009