Coke production is set to exceed 410 million tons; calls for controlling total production volume

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According to statistics from the China Coking Industry Association, from January to June, the coking enterprises included in the statistics achieved a 36.23% increase in sales revenue on a year-on-year basis; however, their total profits declined by 5.57%, with 38.36% of these enterprises suffering losses. The sales profit margin of coking enterprises dropped from 2.72% in the previous year to 2.38%. Due to the inverse relationship between coking coal and coke prices, corporate profit margins have declined, with nearly 40% of coking enterprises suffering losses. In the second half of the year, market demand will gradually decline, and companies will face more severe market challenges. 　　Data shows that from January to May, the manufacturing cost of metallurgical coke for large and medium-sized steel enterprises under monitoring increased by 11.77% on a year-on-year basis, while the average procurement cost of coking coal rose by 12.86%. However, the price of coke increased by only 7.51%, meaning its price increase was 5.35 percentage points lower than that of coking coal. Coking companies can no longer recover the cost of coal purchasing by selling coke; most of them operate with minimal profits or are on the verge of losses. To maintain some level of profitability or reduce losses, these companies rely on coking by-products such as crude benzene, coal tar, ammonium sulfate, and coke oven gas to produce methanol. 　　The China Coking Industry Association believes that, based on current trends, steel exports have been declining month by month since March, with the net export volume of crude steel in the first half of the year increasing by only 6.8% ； In the second half of the year, in the domestic steel market, while demand for construction steel is expected to grow significantly, the market for plates and strips used in production is unlikely to see any improvement. Although many small and medium-sized steel enterprises will still have a high demand for coke, the growth rate of total coke production is set to slow down. The annual coke production is expected to exceed 410 million tons, an increase of about 6% compared to the previous year. 　　Huang Jinqian, president of the China Coking Industry Association, warned companies that in the second half of the year, demand for coke will gradually decline, and the growth rate of total coke production will slow down; the annual demand for coke is expected to be around 410 million tons. As coke production shifts to major steel-producing provinces and western regions, many independent coking enterprises will face more severe market challenges. Coking enterprises must carefully study and understand the market, strive to create their own competitive advantages, actively adapt to market demands, adhere to production based on sales, and control the total volume of production. Source: China Business Network